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Tuesday, October 27, 2009

Supermarket own label brands keep powering on

Earlier in the year I conducted a research project with Mature Marketing to understand the impact of the recession on the 50-plus.

One of the headline findings was the way that older people were switching to own label brands.
So it is not surprising when you read that share in McBride jumped almost 10% on Monday after another stronger-than-expected performance. I bet you didn’t know that McBride is Europe’s largest provider of private label household and personal care products.

Analysts raised their profit forecasts for the third time this calendar year on the back of rising sales and, more importantly, an improved product mix that lifted the group’s operating margin.

Rather than straightforward goods such as bleach and fabric softener, McBride is now shipping more complex products like five-in-one dishwasher tablets – watch out Finish. The company’s MD said that recession-hit consumers continued to prefer retailers’ own-brand goods to those with “fancy packaging that does nothing for the product” - “We see no let up in the demand from retailers for great value and great performing products”.

So will this switch from the premium priced brands being a transitory thing or are we witnessing a mega shift in consumer habits. This is an age-neutral question since the migration to lower priced products seems to be something that knows no age boundaries.

My bet is that we are witnessing a fundamental change in behaviour. Dick Stroud

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