Consumer survey puts these companies ahead

Own brand Balea by dm

Private label has benefited in the face of customer inflation in terms of value for money.

(Photo: dpa)

Cologne Butter: up 42 percent. UHT milk: up 47 percent. Flour: up 48 percent. In view of the annual increase in food prices determined by the Federal Statistical Office, many consumers may have lost their appetite when shopping. The inflation rate was around eight percent in 2022. The price increases for many foods were significantly higher. Consumers therefore take a more critical look at the brands.

“The quality and quantity are unchanged for most products. But inflation drove the price up,” says Felix Leiendecker, head of the study at the Cologne-based market research institute Yougov. “In most cases, consumers therefore perceive a deterioration in the price-performance ratio.”

In a Germany-wide survey, Yougov asked attitudes towards value for money. The overall winner in the ranking was the drugstore chain dm ahead of the discounter Aldi. The payment service provider Paypal ranked third.

Overall, consumers rate around two out of three brands worse than in the previous year. Grocery retailers and drugstores even score 85 percent worse.

“The more often consumers buy a product, the more critical they look at the price,” says Leiendecker. The consolation for retailers: many of their own brands are evading the negative trend.

Rossmann’s cosmetics brand Isana improved by 2.3 points in the Yougov study. Balea von dm was also able to maintain the high level – the traditional brand Nivea, on the other hand, fell by 2.6 points. A similar picture emerges in the snacks and groceries category. The Aldi chocolate Moser Roth increased (plus 0.8 points), while competitor Ritter Sport (minus 5.5 points) fell behind.

“Own brands tend to be perceived more rationally by consumers. They lack the emotionality of classic brands,” says Hermann Sievers, consultant and private label expert at SMK Consult. In the crisis, this is obviously a stabilizing factor.

Private label market share increases

According to the Society for Consumer Goods Research (GfK), retail brands even managed to improve their position. At the end of September 2022, the market share of retail brands such as “Ja!” from Rewe and “Gut & Billig” from Edeka was 42.8 percent, a good two percentage points higher than a year earlier. “Consumers are looking for strategies to keep their household budgets stable despite rising prices,” GfK said.

For the first time since the financial crisis in 2008, the prices of private labels have risen faster than those of classic manufacturer brands. “Retailers are much more flexible when it comes to pricing their own brands than they are with manufacturer brands,” explains Sievers. “The private label gives the impression that the consumer is doing something good for little money.”

In some cases, however, the pricing policy for private labels also fueled resentment. The Hamburg consumer advice center reported that the share of private labels in all complaints about deceptive packaging had risen to 25 percent in the first six months of 2022. In previous years it was 14 percent. According to the consumer center, the discounter Lidl reduced the size of the Floralys toilet paper sheets.

At Aldi, Jack’s Farm lamb steaks have shrunk from 400 grams to 300 grams – the price has remained unchanged at 6.99 euros. According to the company, Aldi’s share of its own brands in the overall range is around 90 percent.

At the drugstore chain dm, private labels account for around 35 percent of total sales. “For us, own brands also serve to offer innovations that are often in the upper price segment for everyone. One example is dm Bio,” says Kerstin Erbe, dm Managing Director for Product Management. In the Yougov ranking, dm Bio is the food with the best value for money.

Investments in environmental projects

Pro Climate is still quite fresh in the dm range of private labels. dm compensates for environmental pollution such as CO2 emissions that arise during the extraction of raw materials, production and disposal of a product by investing in renaturation projects in Germany. Manufacturing partners are also involved in the life cycle assessment and product development, says Managing Director Erbe.

This costs between three and 50 cents per article. Around 40 Pro-Climate products can be found on the dm shelves. Some of these, such as sunscreen and mouthwash, “convince customers, while others, such as toilet paper, which causes high energy costs in production, are in less demand,” says Erbe. dm does not want to be discouraged by this and wants to expand the range. “We want to continue to convince our customers with our own brands.”

More: Alnatura and Denns are learning from discounters during the crisis

source site-11