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19 Janauary 2009
Singapore
House Brands or Private Labels are riding a new wave of popularity in Singapore, with an increasing number of middle and high income households making the switch to these cheaper alternatives in the wake of the deepening recession, according to latest market intelligence from Nielsen.
Latest findings from Nielsen Homescan™ has shown overall growth in House Brand penetration levels, spend, and purchase frequency for the six months between June and November 2008. House Brand penetration stands at 91 percent, with over nine in ten households having purchased at least one House Brand item during the period tracked. Not only have households increased their purchase frequency, they have also spent more on House Brands during this six month period.
“Contrary to the common perception that House Brands are confined to lower income consumers, high-income households are showing a strong penchant for these cheaper choices” commented Ms Ooi Pin Pin, Retailer Services Associate Director, The Nielsen Company, Singapore.
“Our latest Nielsen Homescan™ report shows that households with the highest combined income of above $6,000 registered the biggest jump of 19 percent, now making up 28 percent of House Brand buyers. In fact, middle-class households with combined income of above $4,000 account for 49 percent of the total House brand consumers,” added Ms Ooi.
House Brand sales in Singapore have also been growing steadily - reflecting a trend of rising acceptance for them amongst Singaporeans. Nielsen’s Retail Index tracking reflected surges in overall growth of House Brand sales over three six-monthly periods. Sales figures have consistently been growing from seven percent in May to October 2007, to 20 percent in November 2007 to April 2008, and a further 26 percent growth for the subsequent May to October 2008 period.
Staples and Paper categories are apparently the most sought-after House Brand items. Across the 80 grocery categories tracked by Nielsen, the top three contributing items are Rice, Bread and Cooking Oil, with Rice leading by a significant sales margin. When it comes to consumption within each category, Toilet Roll and Facial Tissue House Brands contribute the greatest percentage of sales.
“House Brands are certainly thriving in the current recessionary retail environment, pulling ahead of manufacturers’ products – a never before seen phenomenon. This trend is consistent with the findings of the Nielsen Global Online Survey conducted in October which found that close to one in two (48%) Singapore respondents said they would switch to cheaper grocery brands to cope with the rising cost of living,” commented Ms Ooi.
House Brands are on average 11 percent lower priced than branded products. On top of cheaper pricing, these products are gaining traction as various retailers have been taking advantage of the economic downturn to aggressively promote sales of their respective House Brand through regular promotional campaigns.
“While House Brands tend to compete on price, retailers should take heed of consumers’ receptiveness to move beyond this value proposition and focus on quality and innovation to grow the assortment and market share of their in-house products,” observed Ms Ooi, adding that there are opportunities to expand into other categories such as food and health items as seen in mature House Brand markets.
“It is evident that House Brands have shed their generic and inferior image of yesteryear as consumers search for the bargains that best meet their needs in these tough times,” concluded Ms Ooi.
About Nielsen Homescan™
Nielsen Homescan™ is an in-home scanning based electronic Consumer Panel Service providing continuous measurement of household purchases of products brought into the home. It measures the ongoing consumer purchase behavior and product preferences of participating households, providing insights into purchasing dynamics. The Homescan™ panel in Singapore covers 1,000 households.
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