Households turn to private label goods to cut costs
Many Aussies have had no choice but to rein in their spending in recent years, as the global economy has been shaky at best.
The threat of redundancy has hung over a lot of people and the cost of living has soared across the country.
A number of recent studies have suggested that more citizens are trying to put extra cash into their savings accounts in order to give themselves a safety buffer should something unforeseen happen.
However, plenty of Aussies have very little disposable income left once all of their bills are paid, so cutting costs around the home has never been more important.
According to a new study by IBISWorld, the demand for cheap, private label groceries has soared in Australia in the last few years.
In 2007 – before the global financial crisis – own-brand goods accounted for just 13.5 per cent of all supermarket sales, but this has now risen to more than 25 per cent. This means the "no thrills" sector has gone up by 85 per cent in the past five years.
If nothing else, this is a clear indication that Aussies have reassessed their spending habits and analysts at the research firm believe that higher energy bills and general living costs have forced people to take action.
"The recessive economic climate has been a strong driver of private label growth. Households have been reining in spending, paying off debt and increasing savings," commented general manager of IBISWorld's Australian division Karen Dobie.
"This, coupled with an increase in the range of private label products available, has led many consumers to make the shift to home brands," she added.
Aussies are expected to spend a total of $85.9 billion on groceries in 2012-13 and private label items will account for $21.6 billion of this. This is up from $19.7 billion in 2011-12.
By 2017-18, Ms Dobie predicts that $31.8 billion will be spent of budget groceries, as Aussies will continue to monitor their expenditure very closely.
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