Though virtually all consumers buy some store brand products in the course of a year, the average household spends about 7% of its annual grocery money, or about $246.70, on private-label products, according to the new study by Nielsen Household Services released at a GMA meeting in Chicago.
The Nielsen study showed 17% of households are "heavy" private-label buyers, shop primarily on price and account for 42% of total private-label volume.
Although Loblaw Cos.' President's Choice label is perceived as a premium private label, its products tend to be sampled more by regular private-label buyers than by the brand-conscious shoppers it might be seen as attracting, said Nielsen Household Services VP Greg Starzynski.
President's Choice is sold by Loblaw in Canada and by various chains across the U.S.
Mr. Starzynski also challenged retailers who have long said private labels help them build store loyalty, saying Nielsen's research showed "a relatively low correlation" between store loyalty and the importance of private label to a chain.
"We may be expecting too much from private labels," he said. "We are trying to make them creators of business rather than another competitor in the mix of products that satisfies the consumer's need for variety."
A separate GMA-sponsored study by Willard Bishop Consulting, Barrington, Ill., challenged some perceptions of the private-label business. Bishop's research showed Wal-Mart Stores' aggressive private-label program as a key component in driving penetration of store brands nationally.
The study questioned whether premium private labels like President's Choice would be able to sustain growth, and predicted 1992's private-label volume share of 18.7% of all grocery-product purchases would increase only to 23% by 2000. Some experts have estimated private labels could grow to 40% of unit volumes by that time.