Table of Contents
Introduction
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- Definitions
- Abbreviations
Issues in the Market
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- How has private label performed against overall food and drink spending in recent years?
- Is brand loyalty dead?
- Do consumers foresee further switching down in food?
- Which side is winning the battle for the consumer?
- Are there any safe havens for brands?
Future Opportunities
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- Brand Review
- Guiding Choice
Executive Summary
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- The market
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- Figure 1: Forecast of UK retail value sales of private-label food and drinks, 2005-15
- Private-label food and drink grows slightly behind overall market
- Expectations of economising to benefit private label in short term
- Private-label penetration varies starkly by category
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- Figure 2: Share of private-label sales per category, highest and lowest categories, 2009
- Market factors
- Pressure on food budgets has supported private label
- Brand loyalty is in decline
- Demographic changes bring mixed news for private label
- Companies, brand and innovation
- The grocers shift gear from price to quality
- Private label steadily gaining share in NPD
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- Figure 3: New product launches in the food and non-alcoholic beverages markets, branded vs private label, 2007-10
- The consumer
- Two in three adults buy premium own-brands, half buy economy
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- Figure 4: Purchasing of own-label and branded food and non-alcoholic drink, January 2011
- Cutbacks on the horizon
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- Figure 5: Expected changes in purchase patterns of food and non-alcoholic drinks in the next 12 months,
- Standard own-label rules where it’s hard to add value
- Two in three think they're smart shoppers
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- Figure 6: Attitudes towards own-label and brands, January 2011
- What we think
Internal Market Environment
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- Key points
- Only a minority see brands as superior
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- Figure 7: Trends in attitudes towards quality and make of brands and own-label, 2006-10
- Brand loyalty weakens in recession
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- Figure 8: Trends in attitudes towards brand trust and loyalty, 2006-10
- Free-range, domestic and new continue to appeal to shoppers
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- Figure 9: Trends in attitudes towards free-range, organic and domestic food and new food products, 2006-10
- Interest in cooking continues to grow
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- Figure 10: Trends in attitudes towards cooking and entertaining at home, 2006-10
Broader Market Environment
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- Key points
- Value for money remains in focus as consumer spending recovers slowly
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- Figure 11: Consumer expenditure at current and constant 2010 prices, 2005-15
- Growth of C2s and ABs looks set to benefit brands
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- Figure 12: Forecast changes in the socio-economic structure of the UK population, 2010-15
- Growth of the retired population puts “smart shopping” in focus
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- Figure 13: Forecast changes in the UK population by lifestage, 2010-15
Role of Own-Label in Managing Food Budgets
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- Key points
- Real food spending regains momentum in 2010
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- Figure 14: GFK NOP Consumer Confidence Index, January 2007-January 2011
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- Figure 15: Year-on-year change in consumer prices, overall and food, Q1 2007-Q4 2010
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- Figure 16: Year-on-year change in household spending on food, current and constant prices, Q1 2007-Q3 2010
- Changes to grocery shopping habits
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- Figure 17: Trends in changing grocery shopping habits, January 2009-January 2011
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- Figure 18: Changes to consumers’ grocery shopping habits in the last 12 months, January 2011
- Bargains appeal to more than half of adults
- More than one in four buy more own-label
- Dual effect on premium products
- One in four say shopping habits unchanged
Who’s Innovating?
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- Key points
- Private label accounts for nearly half of new launches
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- Figure 19: New product launches in the food and non-alcoholic beverages markets, branded vs private label, 2007-10
- Figure 20: Share of private label in new product launches, by product category, 2010
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- Figure 21: Change in share of private label in new product launches, by product category, 2007-10
- Premium private label continues to gain share in new launches
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- Figure 22: Share of premium and economy private label in all new product launches, 2007-10
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- Figure 23: Share of premium and economy private label in new product launches, by product category, 2010
- Private label strong in premium and green NPD
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- Figure 24: Share of private label in new product launches, in 15 most common claims in all food and non-alcoholic drinks NPD, 2010
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- Figure 25: Share of private label in economy and premium NPD, 2007-10
- Tesco holds the lead in private-label NPD
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- Figure: Private-label product launches, by leading companies, 2010
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- Figure 26: Share of leading companies of premium and value private-label product launches, 2010
Market Size and Forecast
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- Key points
- Private label grows behind overall food and drink market over 2005-10
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- Figure 27: UK retail value sales of private-label food and drink and all food and drink, Index 2005=100, 2005-10
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- Figure 28: UK retail value sales of private-label food and drink, at current and constant prices, 2005-10
- Grocers’ focus shifts from price to quality
- Forecast
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- Figure 29: Forecast of UK retail value sales of private-label food and drink, 2005-15
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- Figure 30: Forecast of UK retail value sales of private-label food and drinks, 2005-15
- Short-term outlook holds promise for private label
- In the longer term quality will gain greater weight
- Forecast methodology
Branded vs. Private-Label by Category
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- Key points
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- Figure 31: Share of private-label sales per category, 2009
- Markets dominated by own-label
- Fresh meat, fish, poultry, fruit & vegetables
- Chilled ready meals and pizza
- Dried pasta, milk, edible oils
- Markets dominated by brands
- Chocolate and carbonated soft drinks
- Yogurt, yellow fats, crisps and salty snacks
- Cereal bars, hot chocolate, smoothies
- Private label gains in milk and smoothies, loses in water and hot chocolate
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- Figure 32: Markets in which private label has gained or lost share noticeably, 2007-09
- Markets where private label has gained share
- Milk
- Breakfast cereals
- Smoothies
- Frozen pizza
- Ambient cooking sauces
- Dried pasta
- Markets where private label has lost share
- Bottled water
- Frozen/ambient seafood
- Cheese
- Hot chocolate
Companies and Products
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- Major players
- Asda
- Co-op
- Marks & Spencer (Food)
- Morrisons
- Sainsbury’s
- Tesco
- Waitrose
Consumer – Brand and Own-Label Purchases by Type
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- Key points
- Brands stand marginally ahead of standard own-label
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- Figure 33: Purchasing of own-label and branded food and non-alcoholic drink, January 2011
- Brands
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- Figure 34: Purchasing of branded food and non-alcoholic drink, by gender, age and socio-economic group, January 2011
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- Figure 35: Repertoire of purchase of branded food and drink, by number of product categories, January 2011
- Premium own-label
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- Figure 36: Purchasing of premium own-label food and non-alcoholic drink, by gender, age and socio-economic group, January 2011
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- Figure 37: Repertoire of purchase of premium own-label, by number of product categories, January 2011
- Standard own-label
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- Figure 38: Purchasing of standard own-label food and non-alcoholic drink, by gender, age and socio-economic group, January 2011
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- Figure 39: Repertoire of purchase of standard own-label, by number of product categories, January 2011
- Economy own-label
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- Figure 40: Purchasing of economy own-label food and non-alcoholic drink, by gender, age and socio-economic group, January 2011
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- Figure 41: Repertoire of purchase of economy own-label, by number of product categories, January 2011
- Premium and economy own-label
Consumer – Brand and Own-label Purchases by Category
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- Key points
- Economy own-label
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- Figure 42: Purchasing of economy own-label food and non-alcoholic drink, by product category, January 2011
- Standard own-label
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- Figure 43: Purchasing of standard own-label food and non-alcoholic drink, by product category, January 2011
- Premium own-label
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- Figure 44: Purchasing of premium own-label food and non-alcoholic drink, by product category, January 2011
- Brands
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- Figure 45: Purchasing of branded food and non-alcoholic drink, by product category, January 2011
Consumer – Expected Changes in Purchases of Brands and Own-label
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- Key points
- Cutbacks on the horizon
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- Figure 46: Expected changes in purchase patterns of food and non-alcoholic drinks in the next 12 months, January 2011
- Half of adults foresee no change
- Men and under-25s to buy more premium own-labels and brands
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- Figure 47: Demographic groups the most likely to expect to change their purchase patterns of brands and premium own-label, January 2011
- Women and under-25s expect to economise
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- Figure 48: Demographic groups the most likely to expect to change their purchase patterns of standard and value own-label, January 2011
Consumer – Attitudes towards Brands and Own-label
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- Key points
- Two in three see themselves as savvy shoppers
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- Figure 49: Attitudes towards own-label and brands, January 2011
- One in three see brands as worth paying more for
- Own-labels have become the benchmark for many
- Two in three see themselves as savvy shoppers
- Brand halo appeals to a large minority
- Brands enjoy a lead in trust in expensive items...
- ...less in functional and free-from-additives food
Consumer – Attitudes towards Premium Own-labels
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- Key points
- Majority see premium own-brands as fit for gifting and guests
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- Figure 50: Attitudes towards premium own-label, net of all premium own-labels, January 2011
- Most premium own-brands' popularity peaks as a party piece or gift...
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- Figure 51: Attitudes towards premium own-label as a gift, for guests or to bring to party, by range, January 2011
- ...but they have also found a role as small treats and in everyday use
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- Figure 52: Purchases of premium own-label for special occasions, everyday usage and a treat, by range, January 2011
- M&S rules in justifying a price premium
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- Figure 53: Attitudes towards premium own-label price, by range, January 2011
Consumer – Target Groups
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- Key points
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- Figure 54: Target groups for branded and own-label food and non-alcoholic drink, January 2011
- Brand Lovers (35%)
- Value-led (21%)
- Indifferents (23%)
- Brand-sceptics (21%)
Appendix – Internal Market Environment
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- Figure 55: Agreement with selected lifestyle statements, 2006-10
- Figure 56: Agreement with selected lifestyle statements, by demographics, 2010
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- Figure 57: Agreement with selected lifestyle statements, by demographics, 2010
- Figure 58: Agreement with selected lifestyle statements, by demographics, 2010
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Appendix – Changing Grocery Shopping Habits
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- Figure 63: Most popular changing grocery shopping habits, by demographics, December 2010
- Figure 64: Next most popular changing grocery shopping habits, by demographics, December 2010
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- Figure 65: Other changing grocery shopping habits, by demographics, December 2010
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Appendix – Who’s Innovating
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- Figure 66: Share of private label in new product launches, by category, 2010
- Figure 67: Share of private label in new product launches, by claim, 2010
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Appendix – Market Size and Forecast
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- Figure 68: Best and worst case forecasts UK retail value sales of private label food and drink, 2010-15
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Appendix – Consumer – Brand and Own-Label Purchases by Type
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- Figure 69: Purchase of brands and own-label in food and non-alcoholic drink, January 2011
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- Figure 70: Purchases of branded and different types of own-label food and drink, by demographics, January 2011
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- Figure 71: Repertoire of purchase of brands, by demographics, January 2011
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- Figure 72: Repertoire of purchase of premium own-label, by demographics, January 2011
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- Figure 73: Repertoire of purchase of standard own-label, by demographics, January 2011
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- Figure 74: Repertoire of purchase of economy own-label, by demographics, January 2011
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Appendix – Consumer – Brand and Own-Label Purchases by Category
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- Figure 75: Purchases of brands and different types of own-label in food and non-alcoholic drink, by category (by respondents using products in that category), January 2011
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- Figure 76: Purchases of brands and different types of own-label in food and non-alcoholic drink, by type of own-label/brand, January 2011
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- Figure 77: Categories in which own-label (standard, economy and premium) is most popularly purchased, by product category, by demographics, January 2011
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- Figure 78: Categories in which own-label is purchased (standard, economy and premium) second most, by product category, by demographics, January 2011
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- Figure 79: Other categories in which own-label is purchased (standard, economy and premium), by product category, by demographics, January 2011
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- Figure 80: Other categories in which own-label (standard, economy and premium) is purchased, by product category, by demographics, January 2011
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- Figure 81: Categories in which own-label (standard, economy and premium) is purchased least, by product category, by demographics, January 2011
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- Figure 82: Categories in which brands are most typically purchased, by category, by demographics, January 2011
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- Figure 83: Categories in which brands are next most typically purchased, by category, by demographics, January 2011
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- Figure 84: Categories in which brands are popularly purchased, by category, by demographics, January 2011
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- Figure 85: Other categories in which brands are purchased, by category, by demographics, January 2011
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- Figure 86: Categories in which brands are least typically purchased, by category, by demographics, January 2011
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- Figure 87: Categories in which premium own-labels are most typically purchased, by category, by demographics, January 2011
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- Figure 88: Categories in which premium own-labels are next most typically purchased, by category, by demographics, January 2011
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- Figure 89: Other categories in which premium own-labels are purchased, by category, by demographics, January 2011
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- Figure 90: Other categories in which premium own-labels are purchased, by category, by demographics, January 2011
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- Figure 91: Categories in which premium own-labels are least typically purchased, by category, by demographics, January 2011
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- Figure 92: Categories in which standard own-labels are most typically purchased, by category, by demographics, January 2011
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- Figure 93: Categories in which standard own-labels are next most typically purchased, by category, by demographics, January 2011
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- Figure 94: Other categories in which standard own-labels are purchased, by category, by demographics, January 2011
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- Figure 95: Other categories in which standard own-labels are purchased, by category, by demographics, January 2011
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- Figure 96: Categories in which standard own-labels are least typically purchased, by category, by demographics, January 2011
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- Figure 97: Categories in which economy own-labels are most typically purchased, by category, by demographics, January 2011
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- Figure 98: Categories in which economy own-labels are next most typically purchased, by category, by demographics, January 2011
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- Figure 99: Other categories in which economy own-labels are purchased, by category, by demographics, January 2011
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- Figure 100: Other categories in which economy own-labels are purchased, by category, by demographics, January 2011
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- Figure 101: Categories in which economy own-labels are least typically purchased, by category, by demographics, January 2011
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Appendix - Consumer – Expected Changes in Purchases of Brands and Own-label
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- Figure 102: Expected changes in purchase patterns of branded and premium own-label food and non-alcoholic drinks in the next 12 months, by demographics, January 2011
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- Figure 103: Expected changes in purchase patterns of standard and economy own-label food and non-alcoholic drinks in the next 12 months, by demographics, January 2011
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- Figure 104: Expected changes in purchase patterns of food and non-alcoholic drinks in the next 12 months, no change, more premium/branded, less premium/branded, by demographics, January 2011
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- Figure 105: Expected changes in purchase patterns of food and non-alcoholic drinks in the next 12 months, by types of products currently purchased, January 2011
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- Figure 106: Expected changes in purchase patterns of food and non-alcoholic drinks in the next 12 months, by personal concerns, January 2011
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- Figure 107: Expected changes in purchase patterns of food and non-alcoholic drinks in the next 12 months, by personal concerns, January 2011 (continued)
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- Figure 108: Expected changes in purchase patterns of food and non-alcoholic drinks in the next 12 months, by other personal concerns, January 2011 (continued)
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Appendix – Consumer – Attitudes towards Brands and Own-label
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- Figure 109: Attitudes towards brands and own-label, January 2011
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- Figure 110: Agreement with the statements ‘I buy the product offering best value for money whether branded or supermarket own-label’ and ‘In some cases I prefer the taste/quality of supermarket own-label products to branded’, by demographics, January 2011
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- Figure 111: Agreement with the statements ‘I only buy standard supermarket own-label products if they are clearly cheaper than the branded equivalents’ and ‘For more expensive food and drink products I trust brands more than own-label’, by demographics, January 2011
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- Figure 112: Agreement with the statements ‘Branded products usually offer better quality’ and ‘I buy standard supermarket own-label products only to save money and would rather purchase branded products’, by demographics, January 2011
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- Figure 113: Agreement with the statements ‘I compare the ingredients listed on supermarket own-label products to branded versions before buying’ and ‘I trust brands more than supermarket own-label when buying functional food and drinks (eg probiotic, cholesterol-lowering)’, by demographics, January 2011
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- Figure 114: Agreement with the statements ‘Branded products are worth paying more for’ and ‘Supermarket own-label products in partnership with a major brand or chef offer higher quality than standard supermarket own-label products’, by demographics, January 2011
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- Figure 115: Agreement with the statement ‘I trust brands more when it comes to artificial additives/preservatives salt or saturated fats’, by demographics, January 2011
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- Figure 116: Attitudes towards brands and own-label, by brand and own-labels purchased, January 2011
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Appendix – Consumer – Attitudes towards Premium Own-label
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- Figure 117: Attitudes towards premium own-labels, by brands, January 2011
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- Figure 118: Attitudes towards premium own-label, netted across brands, January 2011
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Appendix – Consumer – Target Groups
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- Figure 119: Attitudes towards brands and own-label, by target groups, January 2011
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- Figure 120: Target groups, by demographics, January 2011
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- Figure 121: Changes in shopping habits, by target groups, January 2011
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- Figure 122: Statements on eating, by target groups, January 2011
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- Figure 123: Purchase of brands and own-label, by target groups, January 2011
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- Figure 124: Expected changes in purchase patterns of food and non-alcoholic drinks in the next 12 months, by target groups, January 2011
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