SHOPPERS were shocked this week when a 750g pack of Lurpak butter in Sainsbury’s hit £7.25.
Tubs of the Danish spread soared as the average cost of a 500g pack increased by 33 per cent compared with a year ago.
Prices of other big brands have gone up by as much as 60 per cent — which has led to half of all shopping baskets now being filled with own-brand items.
Experts are even warning that our most recognisable branded foods could become a thing of the past as inflation soars and shoppers turn to cheaper alternatives.
We buy more own-label food than anywhere in Europe, and supermarkets are pouring hundreds of millions of pounds into expanding their budget lines.
Consumer expert Martyn James said: “The cost-of-living crisis has killed brand loyalty stone dead. People will not put up with exorbitant prices, especially when cheaper options are next to them on the shelves.
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“With no end in sight to the cost-of-living crisis, brand-name products must adapt or vanish from the aisles.”
Tesco recently removed Heinz products from its shelves as it refused to pass on increases in prices to customers hit by soaring inflation. The companies finally struck a deal on Friday to get Heinz products back on sale. Other top brands, including Warburtons, McVitie’s, Hovis, Kings- mill, Walkers and Cadbury are also up against it.
Fraser McKevitt, of data firm Kantar, said: “Supermarkets make more money from an own-brand product than from one they buy in from suppliers.
“In the past year we have seen buys of branded goods declining and own-brand goods have risen by 2.9 per cent, boosted by Aldi and Lidl’s strong performances, both of whom have extensive own-label repertoires. We can also see consumers turning to value ranges such as Asda Smart Price, Co-op Honest Value and Sainsbury’s Imperfectly Tasty to save money.”
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Analysts at NielsenIQ, a global measurement and data analytics company, say sales of branded groceries fell by 5.1 per cent in the four weeks to March 26. Own-label sales were down by just 1.9 per cent over the same period.
Meanwhile, 38 per cent of shoppers say they have already started to swap their tried-and-trusted brands for supermarket value ranges or cheaper alternatives in the past 12 months. A further 19 per cent say they will “definitely” do this as the year progresses and another 28 per cent will consider it, according to research by insight and strategy consultancy BritainThinks.
Only four per cent of consumers say they will “definitely not” swap their usual brands for cheaper products or budget ranges.
Another sign of the own-label surge can be seen in the shifting market share of the major retailers.
‘Challenging times’
Aldi and Lidl, which rely on their own label lines for 90 per cent of their sales, are now the country’s fifth and sixth-biggest supermarket chains.
They are snapping at the trade’s traditional big four — Tesco, Sainsbury’s, Asda and Morrisons — commanding 8.8 per cent and 6.6 per cent of the market respectively.
A decade ago, the two German-based discounters had a market share of just 5.5 per cent between them.
Supermarkets have also been increasingly investing in their own-brand ranges. Last month Asda announced it was launching Just Essentials, which it claims is the largest offer of budget-friendly staples in the market. The chain has invested £45million in developing the range.
Even upmarket M&S is investing in lower-priced products. The retailer announced this week it will lower prices in its Remarksable range and claimed it has invested more than £100million in its value items over the past three years.
Figures obtained by The Sun on Sunday also show how we lead the way across Europe when it comes to buying own-label goods.
A study by Statista revealed almost 50 per cent of our purchases were own-brand, ahead of 43 per cent in Holland and 37 per cent in Portugal. In Spain that proportion falls to 25 per cent.
Meanwhile, big-name suppliers continue to put up prices. Some jars of Kenco coffee are up by 50 per cent from pre-pandemic prices. Batchelors has put up the cost of Super Noodles by 60 per cent.
Consumer expert Jane Hawkes reckons even loyal customers could eventually walk away from Heinz and other top brands.
She said: “Shoppers are doing everything they can to reduce the cost of a weekly grocery shop.
“One way is to switch to a cheaper alternative or the supermarket value brands. To retain customer loyalty, brands need to freeze or reduce prices, take the short-term hit and be the brands people can count on in challenging times.
“Failure to do so is short-sighted at the very least and fatal at worst.”
Analytics adviser Richard Hyman added: “Times of economic squeeze tend to favour supermarket own-labels.
“Tesco is the biggest player in the market by far and it is asserting its very powerful position. It wants suppliers to get in line but some are not wanting to play ball.
“Supermarkets make more money from an own-brand product than they do from a manufactured product because, apart from anything else, the manufacturer has a higher cost.
“In a particular category a retailer may be putting more money behind its own product.
“They are able to make a better margin from having a product with their name on it.
“And they can manage the supply chain without third-party companies.
“So there are various cases in the chain where they’re able to save money and that goes to the bottom line in the form of a better margin.”
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Richard did have some good news for recognisable labels though.
He added: “I don’t think they will stop stocking the big-name brands completely because the customers want choice.”
Try these swaps and save up to £16.42 each shop
HERE are just a few examples of how swapping from big brands to supermarket own-label products can save you cash. Put these versions in your basket – some of which are almost 80 per cent cheaper – and you will have £16.42 extra in your pocket at the end of the shop.
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