Loyalty shift to private label lines could be permanent, says Verdict, with customers opting for premium own-brand and eco-friendly ranges when recession is over.
Under economic duress since Q4 2008, EU consumers have migrated to private label ranges on an "unprecedented scale", according to a new report from Verdict Research.

Value has become the overriding objective in retailers' private label development, as trading down and switching have become endemic and purchase decision-making times have increased.

While the major EU grocers launched value-end "fighter" ranges to help drive sales during the downturn and safeguard footfall, Verdict predicts that, after the recession, consumers will shift back to higher end private label ranges.

The report states: "Rising unemployment and continued uncertainty about the broader macroeconomic outlook will ensure that private label as a whole will continue to gain share at the expense of branded goods."

Companies in the DIY and electricals sector are also said to be "milking the potential of energy efficiency" by launching new appliances and devices that can help customers reduce their carbon footprint and save money.

Verdict believes that the trend towards energy efficient products heralds a massive opportunity to boost own-label profiles, with DIY retailers starting to focus on value and on 'outgreening' each other.

"The 'green theme' is almost predestined for retailers' private label development, as it enables tem to differentiate their offering and raise their profile in terms of quality perceptions and environmentally friendly positioning."

Verdict senior analyst Daniel Lucht believes H2 2008 and H1 2009 were the optimal times for retailers to launch new private label lines, as customers were willing to shop around and give new ranges a try. However, he predicts that, "on a broader level, as long as climate change remains an acute threat, being environmentally friendly will remain very much on the agenda."