Premium products still in demand

THERE are many things consumers worry about but paying a high price for premium products in a down economy is the least of those concerns.

“They are, in fact, gaining market share, which shows consumers stick with quality,” Nielsen Country head Bryan Sun said yesterday with the release of the firm’s consumer confidence index.

It showed a loyalty to top brands – despite the fact that the average South African had experienced a tough year with rising inflation heightened by higher food prices, more expensive fuel, a depreciating currency and interest rate hikes at the start of the year.

Statistics SA said yesterday inflation touched 6.4% last month, still in breach of the Reserve Bank’s target 3%-6% band.

Relief is expected next year, when inflation is expected to moderate to an average 5.5%, as a result of a sharp slowdown in food inflation and more favourable base effects of inflation.

Tough conditions have forced consumers to tweak their spending patterns and opt for bulk buying.

Yet, shoppers were not holding back on premium products, the third quarter Nielsen Consumer Confidence Index found.

This was evident as 14 of 16 product categories of the top brands gained market share, and nine of the brand leaders were selling at a premium share and gaining market share, Nielsen said.

Overall consumer optimism in the economy had improved, causing the index to rise nine points to 87 between the second and third quarters of this year.

Sun said annual spend was up by 9% and overall pack sales by 4%.

But a third of the respondents said they were still having sleepless nights about the economy. – BDlive