The effect of inflation: sales of supermarket own brands are soaring, costing 25% less

Due to inflation and falling purchasing power, the consumption of the second and third brands gets a place, and from labels typical of large supermarkets. The change in habits was intensified by the pandemic, and continues with the recession the search for savings in everyday shopping.

In 2022, sales of these products increased by about 20% compared to the previous year, with peaks of up to 40% in certain categories and channels in the months of greatest economic uncertainty. They hope that the trend will continue this year.considering the expected price increases.

SECOND AND THIRD BRANDS GET A SHARE OF SALES

According to Nielsen IQ research, managing your costs, 29% of consumers choose the product with the cheapest price among the preferred options, A phenomenon that has been observed for the consultant since the beginning of the coronavirus, when Argentina was already leading the regional ranking of the highest consumption of white brands.

But price is not the only thing drivers purchase decisionsalthough he is still in charge. The largest selection of own brands made available by supermarket chains to meet growing demand translates into more sales. As in the case of Delicious and St Wendeler from DIA, Ciudad del Lago and TopHouse from Cota, Cuisine & Co from Cencosud and Great Value from ChangoMâs.

So, the big ones retailers continue to diversify the assortment of their own brandswhich make up more than 15% of its turnoverwhen until five years ago the participation in the total volume did not reach double digits.

Own brands are up to 25% cheaper than leading brands.

That way, major supermarket players are expanding their presence on gondolas these options that are up to 25% cheaper than leading brands, with the inclusion of new proposals and editions from working with suppliers, with focus placed on the equation of price and quality.

In that sense, The level of development of own brands in Argentina is three times higher than the Latin American averageaccording to the Nielsen IQ report “Consumer adaptation to the context: How to adapt your consumption to the current situation?”. In the supermarket channel, they make up 16% of the total business.

As second and third brands, 2022 was a year of consolidationaccording to the numbers handled by Scentia. In large chains, they account for 28% of total sales, considering the transactions of both. The numbers grow in drugstores and independent stores, where they reach 37% and 42% of tickets, respectively.

WHICH OWN BRAND PRODUCTS DO ARGENTINANS CONSUME?

The categories of food, dairy products and cleaning products led the way consumption of own brandsaccording to Nielsen IQ. In the first category, canned fish, oils, rice and dry pasta stand out; in the second, milk, meats, yogurts and white cheeses stand out; and the third contains soaps, liquid detergents, cleaning agents, degreasers, bleaches and paper rolls.

A pioneer in category development, DIA has amassed a fan base with more than 1,000 items bearing his name, 75 of which are gluten-free, suitable for people with celiac disease. It brought 80 new references to the market in 2022. Among the recent launches are craft beers and sunscreen.

“We are always looking enhance the own brand proposition with quality options at a competitive price. In this sense, innovation is key: we develop products with a difference, but at a price that customers can or want to pay“, they pointed out from the chain of Spanish origin which works with 200 small and medium-sized suppliers who prepare the offer ‘DIA Products’, a mix that accounts for 30% of their sales.

While, for Carrefour, the participation of own brand represented 21% of its sales in 2022, with a growth of more than 15% compared to 2021. The chain assured that one in five products that customers buy are ‘Carrefour products’.

“The most popular are tuna, full-fat and skim milk, tomato puree, biscuits, pepas, vanilla, toilet paper and kitchen rolls”, they pointed out. Recent launches include pre-frozen pizzas and empanadas, hazelnut spread, coffee pods, organic spices, dry pet food, TACC-free sugar, jams and organic juices..

To develop this portfolio of more than 1500 items, the company cooperates with more than 100 suppliers, 98% of which are small and medium enterprises certified that comply with safety and corporate social responsibility (CSR) standards according to quality parameters tested by double audit, laboratory tests and consumer approval.

In terms of looks, according to Nielsen IQ, this year, the assortment is expected to be deepened ‘no value’ (ie from the assortment of these cheap products), with good sales dynamics and emphasis on basic items in the basket, hand in hand with innovation and communication of its origins.