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Now is a bad time to be a mid-tier brand, according to recent research from Information Resources, Inc.
IRI reports that value brands grew two percent and premium brands receded just over one percent. But mid-tier brands? They fell by three percent.
The economy has helped boost value brands, IRI reported, but it’s also played a role in cushioning upper-tier brands. Consumers have turned to what IRI called “sophisticated splurging.” They’re holding tight to their cherished health and wellness premium brands, but buying them at value outlets like Target or Walmart instead of traditional grocery or convenience stores. Adding to that trend, IRI said, retailers have dramatically increased the sophistication of their store brands to include high-end options.
“These findings remind us that shoppers often act in unpredictable ways,” said Thom Blischok, president of IRI Consulting and Innovation.
The trend may be short lived – or, at least, poised to end soon – according to recent data from Nielsen.
Poll data taken in April showed that consumers plan to start allowing themselves “some of those little indulgences.” They will, however, continue to focus on financial responsibility while transitioning back to mainstream retailers, according to Nielsen’s vice president of global consumer insights, James Russo.
One lasting effect, according to Nielsen. The majority of consumers will continue to save by reducing gas and electricity use, or at least keeping an eye on their bill. That could result in continued light traffic at the beverage stronghold of gas station convenience stores.