Are consumers trading up to national brands?

Wall Street Journal reports:
Improved sales of premium products by Procter & Gamble and Colgate-Palmolive and strong earnings overall suggest customers are returning to brand names after a broad switch to private labels. Strategies to lure back customers have included deep discounts, lavish advertising and product enhancements focused on value.

According to a Sanford C. Bernstein survey of 834 consumers in December, about two-thirds said they had traded down to less-expensive consumer goods over the past 12 months. Moreover, more than three-quarters of those consumers said the cheaper products were “as good or better” than the more expensive items they replaced.

“Many companies with strong premium brands are anticipating a rapid rebound in consumer behavior—a return to normality, as after previous recessions,” McKinsey & Co. analysts wrote in a December report. “They are likely to be disappointed.”tradedownS_wsj

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