From No-Frills to Consumer Thrills

From No-Frills to Consumer Thrills


No-frills packaging for Kiwis on a tight budget is changing – private label also known as store brands, are no longer viewed simply as low-cost alternatives to name brands.

  • Price is important to most consumers and is the primary driver of consumers’ purchase intent for private label. 62% of respondents in New Zealand feel it’s important to get the best price on a product. Moreover, 69% say they purchase private label to save money.
  • Private label’s appeal goes beyond price. Consumers are seeking quality and value, and private label delivers on both of these attributes. Almost two-thirds (62%) amount believe private label offers extremely good value for money, and 60% say buying private label makes them feel like a smart shopper.

Value share is 13.5% in New Zealand and 21% in Australia. Virtually all households in New Zealand purchased private label products in the past year, and private-label growth (4.3%) outpaced total retail growth (1.9%) in New Zealand*.

There has been a significant shift in perceptions from 2009 to 2014 as the reputation of private label has evolved from cheap compromise to quality offering. Private label is more important than ever as consumers want a viable alternative to name brands. 67% of respondents believe private label is a good alternative, and 56% believe most private label quality is as good as that of name brands.

Kiwis are increasingly aware of price, which is no longer a differentiator, but an expectation. Successful store brands will be ones that invest in brand management activities like their supplier peers. Private label brands need to create unique offerings and improve quality concerns with reputation building strategies. By offering value, standard and premium tiers they’ll be better able to compete for consumers at all price points and drive store loyalty.

So what can we expect for private-label brands in the future, and how can they compete?

First, while perceptions have improved, consumers still have quality concerns, particularly when products bear the store name as opposed to pseudo-brands. In addition, strong legacy brands continue to dominate certain categories, creating a barrier to private-label growth.

As in Europe, name brands have attempted to maintain share through aggressive promotions, and deep discounting has narrowed the price differential against private label. Long-term success will require more than aggressive pricing, however. Name brands will need to tier effectively against private-label offerings in the market, develop mainstream branded offerings that are more compelling than ‘basic’ private-label lines and position premium lines as ‘best in category’ above premium private label.

*September 2014 Moving Annual Total (MAT)


The Nielsen Global Survey of Private Label was conducted between Feb. 17 and March 7, 2014, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on its Internet users and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6 %. This Nielsen survey is based only on the behaviour of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 %Internet penetration or an online population of 10 million for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.