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Premium and Value Own-label Food - UK - March 2010

This report looks at how consumers have changed their purchase choices between various types of own-label and branded foods, and how their attitudes towards these have changed, as well as the role of the food retailers.

  • It is vital for brand owners to provide consumers with reminders and tangible reasons to return as only 4% of people plan to buy less own-label once the economy recovers.
  • The exception to the rule and a large potential target group for brands, some five million 16-24-year-olds do not plan to keep buying the same amount of own-labels once the economy improves.
  • Seven million adults see premium own-label as a small treat, but unsuitable for special occasions, making this group an attractive target for products pitched above premium own-label food.
  • The ready meals market is almost devoid of brand presence. Top-end branded products could target the 15m adults who currently buy premium own-label.
  • Premium foods tailored for over 55-year-olds could tap into a loyal pool of 7.6 million over-55s who currently buy premium own-label food.
  • Products offering a momentary escape from the recession through small treats and luxuries that don’t break the bank stand to attract the 17m people just making ends meet.

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Table of contents

  1. Issues in the Market

      • Key themes
        • Definitions
          • Abbreviations
          • Future Opportunities

              • Pushing the ‘home venue’ angle to the limit
                • Faux, but still fancy
                  • Harnessing the consumers’ expertise
                    • User-driven innovation
                      • This is how real people do it
                      • Market in Brief

                        • Market size and forecast
                          • Volatile prices put food in focus
                            • Demographics in favour of premium-end, economy against
                              • Bargains and value own-label gain as people budget
                                • NPD shifts towards value own-label
                                  • Own-labels dominate where they can stand out
                                    • Tesco’s own-labels the most bought
                                      • Premium and value own-label are mass market
                                        • Commodity foods top in value, value-added most popular in premium
                                          • One in 20 plan return to brands
                                            • Brand value questioned
                                            • Internal Market Environment

                                              • Key points
                                                • Food inflation plummeted in 2009
                                                  • Figure 1: UK: Consumer Prices Index annual rate, all items and food and non-alcoholic beverages, 2005-09
                                                • Falling inflation boosts real wages in 2009
                                                  • Food inflation rocketed in 2008, plummeted in 2009
                                                    • Own-brands gain approval
                                                      • Figure 2: Trends in attitudes towards own-label and brands, 2005-09
                                                      • Figure 3: Agreement that ‘On the whole I think well-known brands are better than a shop’s own brand’, by gender, age and socio-economic group, 2009
                                                      • Figure 4: Trends in attitudes towards brand loyalty and new brands, 2005-09
                                                      • Figure 5: Agreement that ‘Once I find a brand I like I tend to stick to it’, by gender, age and socio-economic group, 2009
                                                    • Value own-labels capture media attention
                                                    • Broader Market Environment

                                                      • Key points
                                                        • Demographic changes favour top end
                                                          • The rising number of over-55s to benefit top end
                                                            • More 25-34-year-olds is good news for brands.
                                                              • Figure 6: Trends in the age structure of the UK population, 2009-14
                                                              • Figure 7: Household expenditure on food and restaurants & hotels, as a percentage of total expenditure, by age of household reference person, 2008
                                                            • Growth of ABs in favour of premium end
                                                                • Figure 8: Forecast changes in adult population trends, by socio-economic group, 2004-09 and 2009-14
                                                              • Consumer confidence
                                                                • Figure 9: How respondents describe their financial situation, February 2009-January 2010
                                                                • Figure 10: The likelihood of consumers being concerned about their own financial situation, by gender, age and socio-economic group, January 2010
                                                              • PDI slows in recession
                                                                • Figure 11: Index of PDI and consumer expenditure, current and constant prices, 2004-14
                                                              • Interest rate cut boost lost
                                                              • Role of Own-labels in Managing Food Budgets

                                                                • Key points
                                                                  • Recession sparks changes in food shopping
                                                                    • Figure 12: Trends in ways of saving money when doing grocery shopping in the last 12 months, January 2009-January 2010
                                                                    • Figure 13: Ways of saving money when doing grocery shopping in the last 12 months, January 2010
                                                                  • Three in four have changed their shopping
                                                                    • More than half look for bargains
                                                                      • One in four have switched to own-brand
                                                                        • Changes in own-label purchases in the recession
                                                                          • Figure 14: Share of population buying more and share of population buying less of branded and different types of own-label food and non-alcoholic drink in the last 12 months, December 2009
                                                                        • Standard and value own-label gaining
                                                                          • Premium own-label and branded lose ground
                                                                              • Figure 15: Share of population who have not changed their purchases of branded and own-label food and non-alcoholic drink, in the last 12 months, December 2009
                                                                            • Families, women, under-35s most affected
                                                                              • Figure 16: Demographic groups the most likely to be buying more value and standard own-label foods than a year ago, December 2009
                                                                              • Figure 17: Demographic groups the most likely to be buying less premium own-label and standard food than a year ago, December 2009
                                                                          • Who’s Innovating?

                                                                            • Key points
                                                                              • Economy own-label gains share in NPD in downturn
                                                                                  • Figure 18: Economy and premium launches’ share in all own-label product launches, 2007-09
                                                                                • M&S and Waitrose punch above their size in NPD
                                                                                    • Figure 19: Private label product launches, by leading companies, 2007 and 2009
                                                                                  • Tesco strong in value
                                                                                      • Figure 20: Top companies’ shares in total economy private label product launches, 2008-09
                                                                                    • And in premium
                                                                                      • Figure 21: Top companies’ shares in total premium private label product launches, 2008-09
                                                                                    • Ready meals and processed meat top private label NPD
                                                                                      • Figure 22: Private labels’ share of new launches, by product category, 2009
                                                                                      • Figure 23: Economy and premium products’ share of all private label launches, by product category, 2009
                                                                                    • NPD sees economy own-label move to premium areas
                                                                                    • Market Size and Forecast

                                                                                      • Key points
                                                                                        • Own-label grew by a fifth over 2004-09
                                                                                          • Figure 24: UK retail value sales of own-label food and drinks, at current and constant prices, 2004-14
                                                                                        • Retailers a key driver
                                                                                          • Growth to pick up speed
                                                                                            • Factors used in the forecast
                                                                                            • Branded vs. Own-label by Category

                                                                                              • Key points
                                                                                                • Assessing product categories by brand strength
                                                                                                  • Strongly branded categories with dominant manufacturer
                                                                                                    • Figure 25: Products with strong brand penetration, single dominant manufacturer, 2009
                                                                                                    • Figure 26: Strongly branded products with a single dominant manufacturer, market data, 2008
                                                                                                    • Figure 27: Price positioning of selected products, ketchup, February 2010
                                                                                                  • Strongly branded categories with several leading manufacturers
                                                                                                    • Figure 28: Products with strong brand penetration, several leading manufacturers, 2009
                                                                                                    • Figure 29: Strongly branded products with several leading manufacturers, market data, 2008
                                                                                                    • Figure 30: Price positioning of selected products, bread, February 2010
                                                                                                    • Figure 31: Price positioning of selected products, yogurt, February 2010
                                                                                                  • Own-label dominant categories
                                                                                                    • Figure 32: Products with strong own-brand penetration, 2009
                                                                                                    • Figure 33: Own-label-dominant products, market data, 2008
                                                                                                    • Figure 34: Price positioning of selected products, milk, February 2010
                                                                                                    • Figure 35: Price positioning of selected products, cheddar, February 2010
                                                                                                  • Intermediate categories
                                                                                                    • Figure 36: Intermediate product categories, 2009
                                                                                                    • Figure 37: Intermediate categories, market data, 2008
                                                                                                    • Figure 38: Price positioning of selected products, ambient tomato soup, February 2010
                                                                                                • Retailer Comparison

                                                                                                  • Key points
                                                                                                    • Retailer comparison – total sales
                                                                                                      • Figure 39: Leading UK food retailers, market shares, 2008
                                                                                                    • Consumers’ own-label brand preferences
                                                                                                      • Tesco own-brands are most bought
                                                                                                        • Figure 40: Purchasing of premium and value own-label food, by brand, December 2009
                                                                                                        • Figure 41: Stores used regularly for grocery shopping, December 2009
                                                                                                      • M&S and Waitrose lead among regulars
                                                                                                          • Figure 42: Share of each supermarket’s regular shoppers who have bought its premium own-label and any premium own-label, by supermarket, December 2009
                                                                                                          • Figure 43: Share of each supermarket’s regular shoppers who have bought its value own-label and any value own-label, by supermarket, December 2009
                                                                                                        • Age and income patterns vary by brand
                                                                                                        • Retailer Profiles

                                                                                                          • Asda
                                                                                                            • Co-op
                                                                                                              • Marks & Spencer
                                                                                                                • Morrisons
                                                                                                                  • Sainsbury’s
                                                                                                                    • Tesco
                                                                                                                      • Waitrose
                                                                                                                      • Brand Elements

                                                                                                                          • Key points
                                                                                                                            • Brand map
                                                                                                                                • Figure 44: Attitudes towards and purchase of own-label food brands, February 2010
                                                                                                                              • Brand qualities of own-label food brands
                                                                                                                                • M&S the top premium brand, Sainsbury’s beats Tesco to best value brand
                                                                                                                                  • Figure 45: Personalities of various own-label food brands, February 2010
                                                                                                                                • Experience of own-label food brands
                                                                                                                                  • Tesco brands the most popular, Waitrose needs to increase penetration
                                                                                                                                    • Figure 46: Consumer purchase of various own-label food brands, February 2010
                                                                                                                                  • Brand consideration for own-label food brands
                                                                                                                                    • Premium brands top in terms of consideration
                                                                                                                                      • Figure 47: Consideration of various own-label food brands, February 2010
                                                                                                                                    • Brand satisfaction for own-label food brands
                                                                                                                                      • M&S and Waitrose customers the most satisfied
                                                                                                                                        • Figure 48: Satisfaction with various own-label food brands, February 2010
                                                                                                                                      • Brand commitment to own-label food brands
                                                                                                                                        • Little commitment when it comes to own-brands
                                                                                                                                          • Figure 49: Commitment to various own-label food brands, February 2010
                                                                                                                                        • Brand intentions for own-label food brands
                                                                                                                                          • Marks & Spencer top in terms of future intentions
                                                                                                                                            • Figure 50: Future purchase intentions for various own-label food brands, February 2010
                                                                                                                                          • Brand recommendation for own-label food brands
                                                                                                                                            • M&S also the most likely to be recommended, followed by Waitrose
                                                                                                                                              • Figure 51: Recommendation of various own-label food brands, February 2010
                                                                                                                                            • Sainsbury’s Taste the Difference
                                                                                                                                              • What the consumer thinks
                                                                                                                                                • Figure 52: Attitudes towards the Sainsbury’s Taste the Difference brand, February 2010
                                                                                                                                              • Sainsbury’s Basics
                                                                                                                                                • What the consumer thinks
                                                                                                                                                  • Figure 53: Attitudes towards the Sainsbury’s Basics brand, February 2010
                                                                                                                                                • Tesco Finest
                                                                                                                                                  • What the consumer thinks
                                                                                                                                                    • Figure 54: Attitudes towards Tesco Finest brand, February 2010
                                                                                                                                                  • Tesco Value
                                                                                                                                                    • What the consumer thinks
                                                                                                                                                      • Figure 55: Attitudes towards the Tesco Value brand, February 2010
                                                                                                                                                    • Waitrose
                                                                                                                                                      • What the consumer thinks
                                                                                                                                                        • Figure 56: Attitudes towards the Waitrose brand, February 2010
                                                                                                                                                      • Asda Extra Special
                                                                                                                                                        • What the consumer thinks
                                                                                                                                                          • Figure 57: Attitudes towards the Asda Extra Special brand, February 2010
                                                                                                                                                        • Asda Smart Price
                                                                                                                                                          • What the consumer thinks
                                                                                                                                                            • Figure 58: Attitudes towards the Asda Smart Price brand, February 2010
                                                                                                                                                          • Morrisons The Best
                                                                                                                                                            • What the consumer thinks
                                                                                                                                                              • Figure 59: Attitudes towards the Morrisons The Best brand, February 2010
                                                                                                                                                            • Morrisons Value
                                                                                                                                                              • What the consumer thinks
                                                                                                                                                                • Figure 60: Attitudes towards the Morrisons Value brand, February 2010
                                                                                                                                                              • Marks & Spencer
                                                                                                                                                                • What the consumer thinks
                                                                                                                                                                  • Figure 61: Attitudes towards the Marks & Spencer brand, February 2010
                                                                                                                                                              • The Consumer – Premium vs. Value

                                                                                                                                                                • Key points
                                                                                                                                                                  • Half the population mix and match
                                                                                                                                                                      • Figure 62: Own-label food and drink brands purchased in last 12 months, December 2009
                                                                                                                                                                    • Three in four buy premium
                                                                                                                                                                      • Figure 63: Purchasing of premium own-label food, by age, gender and socio-economic group, December 2009
                                                                                                                                                                    • Value close behind at 72%
                                                                                                                                                                      • Figure 64: Purchasing of value own-label food, by age, gender and socio-economic group, December 2009
                                                                                                                                                                    • Best of both – 55% buy premium and value
                                                                                                                                                                      • Figure 65: Purchasing of value and premium own-label food, by age, gender and socio-economic group, December 2009
                                                                                                                                                                  • The Consumer – What They Buy

                                                                                                                                                                    • Key points
                                                                                                                                                                      • Value own-label
                                                                                                                                                                        • Fruit and veg top the list
                                                                                                                                                                          • Tins, jars and frozen also popular in value
                                                                                                                                                                              • Figure 66: Value own-label food and drink products purchase, by category, in the last 12 months, December 2009
                                                                                                                                                                            • Top products same across population
                                                                                                                                                                              • One in four are heavy users of value
                                                                                                                                                                                • Figure 67: Repertoire of value own-label products bought, December 2009
                                                                                                                                                                                • Figure 68: Repertoire of value own-label products bought, AB socio-economic group, December 2009
                                                                                                                                                                              • Premium own-label
                                                                                                                                                                                • Convenient foods top premium list
                                                                                                                                                                                    • Figure 69: Premium own-label food and drink products bought in the last 12 months, by category, December 2009
                                                                                                                                                                                  • Few differences in favourites by demographics
                                                                                                                                                                                    • One in five are heavy users of premium
                                                                                                                                                                                      • Figure 70: Repertoire of premium own-label products bought, December 2009
                                                                                                                                                                                    • Lower-income households buy into premium
                                                                                                                                                                                      • Figure 71: Repertoire of premium own-label products bought, by households earning less than £15,500, December 2009
                                                                                                                                                                                  • The Consumer – Attitudes towards Own-label Purchases in the Recession

                                                                                                                                                                                    • Key points
                                                                                                                                                                                      • Two in five try own-brand – one in 20 to switch back
                                                                                                                                                                                          • Figure 72: Attitudes towards changing own-label grocery purchases in the last 12 months, December 2009
                                                                                                                                                                                        • Re-evaluating brand value
                                                                                                                                                                                          • Switched to own-label – not coming back?
                                                                                                                                                                                          • The Consumer – Comparing Own-label and Brands

                                                                                                                                                                                            • Key points
                                                                                                                                                                                              • Questioning the value of brands
                                                                                                                                                                                                • Quality differentials
                                                                                                                                                                                                    • Figure 73: Consumer attitudes towards branded and own-label products, December 2009
                                                                                                                                                                                                  • Just one in three buy the best
                                                                                                                                                                                                    • Premium own-label – special enough?
                                                                                                                                                                                                      • What do brands offer?
                                                                                                                                                                                                          • Figure 74: Consumer perceptions of benefits of branded and own-label food, December 2009
                                                                                                                                                                                                      • The Consumer – Target Groups

                                                                                                                                                                                                        • Key points
                                                                                                                                                                                                          • Brand lovers in the minority
                                                                                                                                                                                                            • Figure 75: Consumer typologies for value and premium own-labels, December 2009
                                                                                                                                                                                                          • Mix and matchers (18%)
                                                                                                                                                                                                            • Brand lovers (16%)
                                                                                                                                                                                                              • Own-label lovers (21%)
                                                                                                                                                                                                                • Apathetic (22%)
                                                                                                                                                                                                                  • Brand doubters (23%)
                                                                                                                                                                                                                  • Appendix – Internal and Broader Market Environment

                                                                                                                                                                                                                      • Figure 76: Trends in attitudes towards own-label, 2004-09
                                                                                                                                                                                                                      • Figure 77: Attitudes towards own-label, by demographics, 2009
                                                                                                                                                                                                                      • Figure 78: Trends in how respondents describe their financial situation, February 2009-January 2010
                                                                                                                                                                                                                  • Appendix – Role of Own-labels in Managing Food Budgets

                                                                                                                                                                                                                      • Figure 79: Changes in grocery shopping habits, December 2009
                                                                                                                                                                                                                      • Figure 80: Changes in purchases of branded and own-label foods in the last 12 months, December 2009
                                                                                                                                                                                                                      • Figure 81: Changes in purchases of branded and own-label in the last 12 months, by demographics, December 2009
                                                                                                                                                                                                                      • Figure 82: Changes in purchases of branded and own-label in the last 12 months, by demographics, December 2009 (continued)
                                                                                                                                                                                                                  • Appendix – Branded vs. Own-label by Category

                                                                                                                                                                                                                      • Figure 83: Products with strong brand penetration, penetration ratio 2009
                                                                                                                                                                                                                      • Figure 84: Products with strong own-brand penetration, penetration ratio 2009
                                                                                                                                                                                                                      • Figure 85: Intermediate product categories, penetration ratio 2009
                                                                                                                                                                                                                  • Appendix – The Consumer – Premium vs. Value

                                                                                                                                                                                                                      • Figure 86: Own-label food and drink brands purchased in last 12 months, December 2009
                                                                                                                                                                                                                      • Figure 87: Premium and value own-label food and drinks purchased in last 12 months, by demographics, December 2009
                                                                                                                                                                                                                      • Figure 88: Most popular own-label food and drinks brands purchased in last 12 months, by demographics, December 2009
                                                                                                                                                                                                                      • Figure 89: Next most popular own-label food and drinks brands purchased in last 12 months, by demographics, December 2009
                                                                                                                                                                                                                      • Figure 90: Least popular own-label food and drinks brands purchased in last 12 months, by demographics, December 2009
                                                                                                                                                                                                                  • Appendix – The Consumer – What They Buy

                                                                                                                                                                                                                      • Figure 91: Most purchased value own-label food and drink products in the last 12 months, by demographics, December 2009
                                                                                                                                                                                                                      • Figure 92: Next most purchased value own-label food and drink products in the last 12 months, by demographics, December 2009
                                                                                                                                                                                                                      • Figure 93: Other purchased value own-label food and drink products in the last 12 months, by demographics, December 2009
                                                                                                                                                                                                                      • Figure 94: Most purchased premium own-label food and drink products in the last 12 months, by demographics, December 2009
                                                                                                                                                                                                                      • Figure 95: Repertoire of value own-label products purchased, December 2009
                                                                                                                                                                                                                      • Figure 96: Repertoire of value own-label products, by demographics, December 2009
                                                                                                                                                                                                                      • Figure 97: Types of value own-label products bought, by repertoire of value own-label products, December 2009
                                                                                                                                                                                                                      • Figure 98: Repertoire of premium own-label products purchased, December 2009
                                                                                                                                                                                                                      • Figure 99: Repertoire of premium own-label products, by demographics, December 2009
                                                                                                                                                                                                                      • Figure 100: Types of premium own-label products bought, by repertoire of premium own-label products, December 2009
                                                                                                                                                                                                                  • Appendix – The Consumer – Attitudes towards Own-label Purchases in the Recession

                                                                                                                                                                                                                      • Figure 101: Attitudes towards changing own-label grocery purchases in the last 12 months, December 2009
                                                                                                                                                                                                                      • Figure 102: Attitudes towards changing own-label grocery purchases in the last 12 months, by demographics, December 2009
                                                                                                                                                                                                                      • Figure 103: Attitudes towards changing own-label grocery purchases in the last 12 months, by type of ownlabel food and drinks purchased in last 12 months, December 2009
                                                                                                                                                                                                                      • Figure 104: Attitudes towards changing own-label grocery purchases in the last 12 months, by changes in branded and own-label food and drink purchases in the last 12 months, December 2009
                                                                                                                                                                                                                      • Figure 105: Attitudes towards changing own-label grocery purchases in the last 12 months, by changes in branded and own-label food purchases in the last 12 months, December 2009
                                                                                                                                                                                                                  • Appendix – The Consumer – Comparing Own-label and Brands

                                                                                                                                                                                                                      • Figure 106: Attitudes towards branded and own-label products, December 2009
                                                                                                                                                                                                                      • Figure 107: Most common attitudes towards branded and own-label products, December 2009
                                                                                                                                                                                                                      • Figure 108: Next most common attitudes towards branded and own-label products, by demographics, December 2009
                                                                                                                                                                                                                      • Figure 109: Attitudes towards branded and own-label products, by types of own-label food and drink brands purchased in last 12 months, December 2009
                                                                                                                                                                                                                      • Figure 110: Perceptions of benefits of branded and own-label food, December 2009
                                                                                                                                                                                                                      • Figure 111: Most popular perceptions of benefits of branded and own-label food, by demographics, December 2009
                                                                                                                                                                                                                      • Figure 112: Next most popular perceptions of benefits of branded and own-label food, by demographics, December 2009
                                                                                                                                                                                                                      • Figure 113: Perceptions of benefits of branded and own-label food, by types of own-label food and drinks purchased in last 12 months, December 2009
                                                                                                                                                                                                                  • Appendix – The Consumer – Target Groups

                                                                                                                                                                                                                      • Figure 114: Target groups, December 2009
                                                                                                                                                                                                                      • Figure 115: Target groups, by demograhics, December 2009
                                                                                                                                                                                                                      • Figure 116: Types of own-label food and drinks brands purchased in last 12 months, by target groups, December 2009
                                                                                                                                                                                                                      • Figure 117: Changes in own-label and branded food and drink purchases n the last 12 months, by target groups, December 2009
                                                                                                                                                                                                                      • Figure 118: Attitudes towards changing own-label grocery purchases, by target groups, December 2009
                                                                                                                                                                                                                      • Figure 119: Attitudes towards branded and own-label products, by target groups, December 2009
                                                                                                                                                                                                                      • Figure 120: Perceptions of benefits of branded and own-label food, by target groups, December 2009

                                                                                                                                                                                                                  Premium and Value Own-label Food - UK - March 2010

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