Table of Contents
Introduction
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- Definitions
- Abbreviations
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 drink, 2006-16
- Private labels continue to grow, albeit at a slower rate than the overall market
- The majority of consumers continue to adjust their shopping habits
- Private labels enjoy varying fortunes across different markets
- Market factors
- Consumer confidence remains weak…
- …with brand loyalty falling as a result
- Population changes provide private labels with challenges and opportunities
- Companies, brands and innovation
- Private labels up the ante in terms of NPD
- Range revamps at Asda and Morrisons fuel NPD
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- Figure 2: New product launches in the food and non-alcoholic beverages markets, branded vs private label, 2007-11
- Retailers look to broaden their appeal when launching new products
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- Figure 3: Product launches of food, alcoholic and non-alcoholic drinks carrying a premium claim, by retailer, 2011
- The consumer
- Private labels enjoy wider usage in food and non-alcoholic drinks
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- Figure 4: Purchasing of own-label and branded food and non-alcoholic drink, December 2011
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- Figure 5: Purchasing of own-label and branded alcoholic drink, December 2011
- Many consumers expect to further economise their grocery shopping habits in 2012
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- Figure 6: Expected changes in purchase patterns of branded and own-label food and drink in the next 12 months, December 2011
- Private label food and drinks make some progress but have work still to do
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- Figure 7: Attitudes towards own-label food and non-alcoholic drink, December 2011
- Consumers become more open towards own-label alcohol
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- Figure 8: Attitudes towards own-label alcoholic drink, December 2011
- Image of brands and own-labels alike have room for improvement
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- Figure 9: Percentage association of attributes for branded and own-label food and drink products, December 2011
- What we think
Issues in the Market
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- Which product ranges stand to gain most in 2012?
- How loyal are consumers in 2011-12?
- How can own-labels improve their image?
- Can own-label alcoholic drinks boost their usage further?
- Which consumers are most likely to embrace venture brands?
Future Opportunities
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- Influentials
- The Real Thing
Internal Market Environment
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- Key points
- Special offers important for two thirds of consumers
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- Figure 10: Trends in attitudes towards special offers, 2007-11
- Consumers become increasingly non-plussed by brands…
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- Figure 11: Trends in attitudes towards brands, 2007-11
- …with enthusiasm to try new things impacting loyalty in a wider sense
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- Figure 12: Trends in attitudes towards product loyalty and trying new products, 2007-11
- Consumers become less responsive to ethical considerations
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- Figure 13: Trends in attitudes towards ethical considerations, 2007-11
- Figure 14: Number of all food and drink product launches in the UK using ethical/environmentally friendly packaging, 2005-11
Broader Market Environment
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- Key points
- Consumers likely to retain a cautious outlook in 2012
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- Figure 15: Consumer Confidence Index, monthly, January 2007-January 2012
- UK consumers are spending more on their food and drink shopping
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- Figure 16: UK: Comparison of spending on food and other selected major categories, 2006-10
- Figure 17: Percentage change in retail prices index vs earnings, 2008-11
- Demographic changes to the UK population create threats and opportunities for private labels
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- Figure 18: Trends in the age structure of the UK population, 2011-16
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- Figure 19: Household expenditure on food and non-alcoholic drink, by value, and percentage of total weekly spend, by age, 2010
- Growing numbers of retirees and third age consumers look set to support brand growth
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- Figure 20: Forecast adult population trends, by lifestage, 2006-16
- Growth in the AB and C2 populations set to benefit brands and premium own-labels
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- Figure 21: Changes in the adult socio-economic structure of the UK population, 2011-16
Private Labels and Shopping Habits
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- Key points
- Consumers are changing their shopping habits in the wake of the recession
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- Figure 22: Changes to consumers’ grocery shopping habits in the last 12 months, December 2011
- Bargains appeal to three in five consumers
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- Figure 23: Changes in consumers’ grocery shopping habits in the last 12 months relating to price, December 2011
- Figure 24: Emotional response to bargains, February 2011
- The discounters are benefiting in the short term
- Own-labels benefit from growing numbers of users…
- …with premium products having mixed fortunes
- The most significant consumer changes revolve around economising...
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- Figure 25: Changes to consumers’ grocery shopping habits within the last year, January 2011 vs December 2011
- ...although there are signs of austerity fatigue as some consumers look to trade back up
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- Figure 26: Changes to consumers’ grocery shopping habits within the last year, January 2011 vs December 2011
Who’s Innovating?
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- Key points
- Private label NPD passes that of brands for the first time in food and non-alcoholic drink markets…
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- Figure 27: New product launches in the food and non-alcoholic beverages markets, branded vs private label, 2007-11
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- Figure 28: Top five categories for private label launches, share of total launches, 2011
- …while private label alcohol has a long way to go
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- Figure 29: New product launches in the alcoholic beverages markets, branded vs private label, 2007-11
- Asda and Morrisons up the ante in NPD
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- Figure 30: Private label product launches of food, alcoholic and non-alcoholic drinks, by leading companies, 2011
- Retailers launch new products against their orientation
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- Figure 31: Product launches of food, alcoholic and non-alcoholic drinks carrying a premium claim, by retailer, 2011
- Private label launches exceed those for brands in many markets
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- Figure 32: Share of private label in new product launches, by product category, 2011
- Drinks categories up the ante in terms of NPD
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- Figure 33: Percentage point changes in the share of private label in new product launches, by product category, 2010 vs 2011
- Environmentally friendly packaging features on a third of private label NPD in 2011
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- Figure 34: Ten most common claims for all food and non-alcoholic drinks among private label NPD, 2011
- Private labels attach even fewer claims to alcohol
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- Figure 35: Ten most common claims for alcoholic drinks among private label NPD, 2011
- Premium NPD on the up in 2011
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- Figure 36: Top five categories for number of launches of premium and economy products for food, alcoholic and non-alcoholic drinks categories, 2011
Market Size and Forecast
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- Key points
- Private labels lose further ground in 2011
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- Figure 37: Index of UK retail value sales of private label and all food and drink, 2006-11
- Private label growth slows in 2011
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- Figure 38: UK retail value sales of private label food and drink, at current and constant prices, 2006-11
- Forecast
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- Figure 39: Forecast of UK retail value sales of private label food and drink, 2006-16
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- Figure 40: UK retail value sales of private label food and drink, at current and constant prices, 2006-16
- Forecast methodology
Brands vs Private Label by Category
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- Key points
- Best- and worst-performing private label markets in 2011
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- Figure 41: Ten of the best- and five of the worst-performing private label markets in 2011
- Private label fortunes vary widely in food and non-alcoholic drink markets
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- Figure 42: Summary share of private label sales, by category for food and non-alcoholic drink, 2011
- Snacks
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- Figure 43: Share of private label of sales in selected snacking categories, 2011
- Fridge/cupboard staples
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- Figure 44: Share of private label of sales in selected fridge/cupboard staple categories, 2011
- Oils, spreads and sauces
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- Figure 45: Share of private label of sales for oil, spread and sauce categories, 2011
- Meals and accompaniments
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- Figure 46: Share of private label of sales in selected meal and meal component categories, 2011
- Frozen meals and accompaniments
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- Figure 47: Share of private label of sales in selected frozen food categories, 2011
- Non-alcoholic drinks
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- Figure 48: Share of private label in in-home sales in selected non-alcoholic drink categories, 2011
- Private labels notably less competitive in the alcoholic drink markets
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- Figure 49: Share of private label in in-home sales of alcoholic drinks, by category, 2011
- The advent of ‘Venture Brands’
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- Figure 50: Tesco venture brand launches, 2011
Companies and Products
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- Tesco out in front in a competitive landscape
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- Figure 51: Top five food retailers’ market share, 2011
- Figure 52: Leading food retailers in the UK, 2010/11
- Asda
- The Co-operative Group
- Marks & Spencer (M&S) (Food)
- Morrisons
- Sainsbury’s
- Tesco
- Waitrose
- Asda well positioned to serve core consumer interests
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- Figure 53: Attitudes towards selected retailers, February 2011
Consumer – Usage of Food and Non-alcoholic Drinks
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- Key point
- Note on food and non-alcoholic drink categories
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- Figure 54: Purchasing of own-label and branded food and non-alcoholic drink, December 2011
Consumer – Usage of Alcoholic Drinks
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- Key points
- Branded alcohol drinks used by eight in ten adults
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- Figure 55: Purchasing of own-label and branded alcoholic drink, December 2011
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- Figure 56: Repertoire of usage of alcoholic drinks (number of different types of drinks used) in the last six months, by brand and own-label, December 2011
- Widespread brand usage in beer and wine
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- Figure 57: Usage of branded alcoholic drinks in the last six months, by type, December 2011
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- Figure 58: Usage of branded alcoholic drinks in the last six months, by type, December 2011
- Own-label wine makes its mark
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- Figure 59: Usage of own-label alcoholic drinks in the last six months, by type, December 2011
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- Figure 60: Usage of own-label alcoholic drinks in the last six months, by type, December 2011
Consumer – Expected Changes in Purchasing
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- Key points
- Brands set to retain the majority of its users
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- Figure 61: Expected changes in purchase patterns of branded food and drink in the next 12 months, December 2011
- Standard own-label stands to benefit from increased usage
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- Figure 62: Expected changes in purchase patterns of standard own-label food and drink in the next 12 months, December 2011
- Premium own-label
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- Figure 63: Expected changes in purchase patterns of premium own-label food and drink in the next 12 months, December 2011
- Value own-label
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- Figure 64: Expected changes in purchase patterns of value own-label food and drink in the next 12 months, December 2011
Consumer – Attitudes towards Private Label Food and Non-alcoholic Drink
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- Key points
- Own-labels make progress but have work still to do
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- Figure 65: Attitudes towards own-label food and non-alcoholic drink, December 2011
- Private labels make progress in terms of quality perception
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- Figure 66: Attitudes towards own-label food and non-alcoholic drink, December 2011
- Own-brands make progress but most shoppers see a place for brands
- Half of adults sometimes prefer own-brand
- Three quarters of adults expect brands to cost more
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- Figure 67: Attitudes towards cost of own-label food and non-alcoholic drink, December 2011
- Potential for ranges which bridge the divide between brands and own-labels
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- Figure 68: Attitudes towards venture brands, December 2011
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- Figure 69: Examples of brands (on the left-hand side) competing with Tesco venture brands in the soup and ice cream markets
Consumer – Attitudes towards Private Label Alcoholic Drink
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- Key points
- Consumer attitudes towards own-label alcohol are less pronounced
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- Figure 70: Attitudes towards own-label alcoholic drink, December 2011
- A third of adults see own-label alcohol as a good way to save money
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- Figure 71: Cost-related attitudes towards own-label alcoholic drink, December 2011
- Image issues remain despite growing consumer acceptance
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- Figure 72: Quality and image-related attitudes towards own-label alcoholic drink, December 2011
- Over a third of users prefer premium to standard own-label drinks
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- Figure 73: Attitudes relating to points of difference for own-label alcoholic drink, December 2011
Consumer – Image of Private Label and Branded Products
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- Key points
- Brands tick more positive boxes than own-labels
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- Figure 74: Attributes associated with branded and own-label food and drink products, December 2011
- Brands seen as trustworthy, traditional and authentic
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- Figure 75: Percentage association of attributes for branded food and drink products, December 2011
- Strong associations on trust and authenticity
- Room for improvement on many associations
- Premium own-labels seen as offering value for money and are family-friendly…but little else
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- Figure 76: Percentage association of attributes for premium own-label food and drink products, December 2011
- Strong value-for-money associations
- Other positive associations are largely absent
- Standard own-labels offer better value for money, but are seen as being less trustworthy
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- Figure 77: Percentage association of attributes for standard own-label food and drink products, December 2011
- Standard own-brands are associated closely with value for money…
- …but struggle on trust and authenticity
- Value own-labels deliver less value for money than standard-tier ranges
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- Figure 78: Percentage association of attributes for value own-label food and drink products, December 2011
- Value ranges lag behind standard for value-for-money associations…
- …as well as faring worse on other associations
Consumer – Target Groups
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- Key points
- Five target groups
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- Figure 79: Target groups for private labels, December 2011
- Enthusiasts (24%)
- Enthusiasts’ usage level or ahead of the average for all types of products
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- Figure 80: Enthusiasts’ purchase patterns of food and non-alcoholic drink, December 2011
- Contradicters (22%)
- Contradicters the least likely group to buy branded products
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- Figure 81: Contradicters’ purchase patterns of food and non-alcoholic drink, December 2011
- Price-driven (20%)
- Price-driven users favour the standard and value own-labels
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- Figure 82: Price-driven’s purchase patterns of food and non-alcoholic drink, December 2011
- Own-label lovers (19%)
- Own-label lovers have wide repertoires, including brands
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- Figure 83: Own-label lovers’ purchase patterns of food and non-alcoholic drink, December 2011
- Sceptics (15%)
- Brand usage high while own-labels struggle badly
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- Figure 84: Sceptics’ purchase patterns of food and non-alcoholic drink, December 2011
Appendix – Internal Market Environment
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- Figure 85: Food and drinks price inflation, annual rate, 2005-11
- Figure 86: PDI and consumer expenditure, at current and constant prices, 2006-16
- Figure 87: Agreement with selected lifestyle statements, 2007-11
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- Figure 88: Agreement with selected lifestyle statements, by demographics, 2011
- Figure 89: Agreement with selected lifestyle statements, by demographics, 2011 (continued)
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- Figure 90: Agreement with selected lifestyle statements, by demographics, 2011 (continued)
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Appendix – Broader Market Environment
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- Figure 91: Household expenditure, by age of household reference person, 2010
- Figure 92: Purchases of branded and own-label food and drink, by demographics, January 2011
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- Figure 93: Trends in the age structure of the UK population, 2006-16
- Figure 94: Forecast adult population trends, by socio-economic group, 2006-16
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Appendix – Private Labels and Shopping Habits
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- Figure 95: Changing grocery shopping habits, by demographics, December 2011
- Figure 96: Changing grocery shopping habits, by demographics, December 2011 (continued)
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- Figure 97: Changing grocery shopping habits, by demographics, December 2011 (continued)
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Appendix – Market Size and Forecast
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- Figure 98: Best- and worst-case forecasts of UK retail value sales of private label food and drink, 2011-16
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Appendix – Consumer – Usage of Alcoholic Drinks
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- Figure 99: Usage of alcoholic drinks in the last six months, by brand and own-label, December 2011
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- Figure 100: Usage of branded alcoholic drinks in the last six months, by demographics, December 2011
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- Figure 101: Usage of alcoholic drinks in the last six months, by demographics, December 2011 (continued)
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- Figure 102: Usage of own-label alcoholic drinks in the last six months, by demographics, December 2011
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- Figure 103: Usage of own-label alcoholic drinks in the last six months, by demographics, December 2011 (continued)
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- Figure 104: Non-usage of alcoholic drinks in the last six months, by demographics, December 2011
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- Figure 105: Non-usage of alcoholic drinks in the last six months, by demographics, December 2011 (continued)
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- Figure 106: Repertoire of usage of premium own-label alcoholic drinks in the last six months, December 2011
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- Figure 107: Repertoire of usage of standard own-label alcoholic drinks in the last six months, December 2011
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- Figure 108: Repertoire of usage of branded alcoholic drinks in the last six months, December 2011
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Appendix – Consumer – Expected Changes in Purchasing
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- Figure 109: Expected changes in purchase patterns of food and drinks in the next 12 months, December 2011
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- Figure 110: Expected changes in purchase patterns of branded food and non-alcoholic drink, by demographics, December 2011
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- Figure 111: Expected changes in purchase patterns of standard own-label food and non-alcoholic drink, by demographics, December 2011
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- Figure 112: Expected changes in purchase patterns of premium own-label food and non-alcoholic drink, by demographics, December 2011
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- Figure 113: Expected changes in purchase patterns of value own-label food and non-alcoholic drink, by demographics, December 2011
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Appendix – Consumer – Attitudes towards Private Label Food and Non-alcoholic Drink
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- Figure 114: Attitudes towards own-label food and alcoholic drink, December 2011
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- Figure 115: Agreement with the statements ‘I buy the cheapest product regardless of whether it is branded or own-label’ and ‘I am interested in trying ‘venture brand’ products’, by demographics, December 2011
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- Figure 116: Agreement with the statements ‘I would only buy a venture brand if it was cheaper than the branded equivalent’ and ‘Own-label products are of better taste/quality than in the past’, by demographics, December 2011
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- Figure 117: Agreement with the statements ‘In some cases I prefer the taste/quality of own-label products rather than branded ones’ and ‘For some foods I would not consider buying own-label’, by demographics, December 2011
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- Figure 118: Agreement with the statements ‘I am interested in own-label products developed with celebrity chefs’ and ‘The own-label offer affects where I shop’, by demographics, December 2011
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- Figure 119: Agreement with the statements ‘I expect branded products to cost more than own-label ones’ and ‘There is no difference in quality between brands and premium own-label products’, by demographics, December 2011
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- Figure 120: Agreement with the statements ‘For more expensive products, I trust brands more than own-label’ and ‘I sometimes find myself buying own-label products as branded equivalents are too expensive for me’, by demographics, December 2011
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Appendix – Consumer – Attitudes towards Private Label Alcoholic Drink
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- Figure 121: Attitudes towards own-label alcoholic drink, December 2011
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- Figure 122: Attitudes towards own-label alcoholic drink, by demographics, December 2011
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- Figure 123: Attitudes towards own-label alcoholic drink, by demographics, December 2011 (continued)
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- Figure 124: Attitudes towards own-label alcoholic drink, by types of branded alcoholic drinks used in the last six months, December 2011
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- Figure 125: Attitudes towards own-label alcoholic drink, by types of branded alcoholic drinks used in the last six months, December 2011
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Appendix – Consumer – Image of Private Label and Branded Products
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- Figure 126: Image of own-label and branded food and drink products, December 2011
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- Figure 127: Image of branded food and drink products, by demographics, December 2011
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- Figure 128: Image of branded food and drink products, by demographics, December 2011 (continued)
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- Figure 129: Overall image of own-label (net) food and drink products, by demographics, December 2011
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- Figure 130: Overall image of own-label (net) food and drink products, by demographics, December 2011 (continued)
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- Figure 131: Image of premium own-label food and drink products, by demographics, December 2011
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- Figure 132: Image of premium own-label food and drink products, by demographics, December 2011 (continued)
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- Figure 133: Image of standard own-label food and drink products, by demographics, December 2011
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- Figure 134: Image of standard own-label food and drink products, by demographics, December 2011 (continued)
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- Figure 135: Image of value own-label food and drink products, by demographics, December 2011
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- Figure 136: Image of value own-label food and drink products, by demographics, December 2011 (continued)
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Appendix – Consumer – Target Groups
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- Figure 137: Target groups, by demographics, December 2011
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- Figure 138: Agreement with attitudes towards own-label food and drink, by target groups, December 2011
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- Figure 139: Usage of alcoholic drinks in the last six months, by brand and own-label, by target groups, December 2011
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- Figure 140: Grocery shopping habits, by target groups, December 2011
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- Figure 141: Expected changes in purchase patterns of food and non-alcoholic drink, by target groups, December 2011
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- Figure 142: Image of food and non-alcoholic drink, by target groups, December 2011
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