As inflation remains high, consumers will turn to private brands to fill their grocery and gift-giving needs this holiday season, according to a new report from private brand consultancy Daymon.
The group’s 2022 Consumer Holiday Study shows that consumers are looking to cut spending while still embracing holiday gatherings and gift-giving. To compensate for higher prices, shoppers will switch brands and eye more private brands than before.
“Private brands are anticipated to be at the forefront of holiday purchasing this year, with 95% of shoppers considering or definitely purchasing private brands,” Chelsey Capps, director of Thought Leadership at Daymon, told Store Brands. “The culmination of inflation, budget constraints, and cooking more food are key drivers in shoppers looking for the best overall value to stretch their wallets further. With nearly one in four consumers saying they are motivated to buy private brands this holiday specifically because the brand they normally buy raised their price, retailers have an opportunity to capitalize on this brand switching behavior to drive private brand trial and loyalty.”
Daymon’s survey found that the youngest generation (Gen Z) said they will be hosting this year at the same rate as Millennials, with 42% of Gen Z and Millennials planning to host Thanksgiving this year in particular. Facing higher food prices than last year, consumers will shift towards private brands. Only 17% of shoppers this year plan to stick to using the national brands for their holiday recipes.
In addition to switching to private brands for food needs, key holiday gifting categories include food and drink items such as wine and chocolates, apparel, and toys and games. Daymon’s study says that the willingness to switch in these categories gives retailers the opportunity to test new approaches when it comes to promoting their private label assortments.
“In planning for gifting needs, we anticipate larger gatherings, tighter budgets, and value-seeking behavior to give room for increased private brand trial,” added Capps. “The top categories that private brands have an opportunity to capture spending dollars include apparel and food gifts, such as gourmet meats and cheeses that make for easy hosting gifts. Additionally, Gen Z and Millennials are expected to drive gifting spend even more than older generations with their plans to spend about the same or more as last year amongst apparel, home goods/décor, and personal care/makeup categories.”