Australian grocery shoppers are becoming less willing to pay for a brand name alone, according to a new joint report from Shop! ANZ and Vypr.

The ‘FMCG: The changing value equation, own brand vs branded in 2026’ report finds that own brand groceries are now a regular part of the weekly shop, particularly in categories where shoppers believe quality and performance are comparable to branded alternatives.

Consumers are most comfortable buying own brand in household essentials (70%), followed by pantry staples (63%) and dairy (59%), with lower price (59%) and good value for money (57%) being the strongest motivators for these decisions.

Encouragingly for retailers, trust in own labels is also increasing, with 45% of surveyed consumers, especially younger consumers (64% of 25-34-year-olds compared to 28% of 45-54-year-olds), saying they feel more confident buying own brand products today than they did a year ago.

However, the findings suggest this isn’t a wholesale rejection of branded products, but a more calculated reassessment of when a brand is worth the extra expense. Branded products continue to hold the strongest appeal in categories where shoppers place greater importance on quality and reassurance. Better taste or quality (58%) and familiarity (46%) remain the main reasons shoppers continue choosing branded products, particularly in snacks (52%) and health and beauty (50%).

A discerning, value-conscious shopper

Shop! ANZ General Manager Carla Bridge says the report points to a more discerning, value-conscious shopper who is less willing to accept a price premium without clear reason.

“Australian shoppers aren’t walking away from branded products, but they’re asking more of them,” she says.

“The days of assuming brand loyalty will carry a product from the shelf to basket are over.

“Consumers are weighing up price, quality, trust and category relevance at the point of purchase, and if the premium offering is not clear, they are increasingly prepared to switch. This is creating a more competitive grocery environment for both retailers and suppliers.”

Fluid shopper behaviour

The report also shows how fluid shopper behaviour has become, with 36% of surveyed consumers switching between own brand and branded products based on category and 27% switching in response to promotions.

This, combined with 80% of surveyed shoppers saying promotions influence their overall purchasing decisions, underscores the importance of both pricing strategy and category positioning.

The influence of promotions is particularly high among consumers aged 25-64 (79%), reinforcing the role of promotional strategies in engaging mid-life shoppers managing household budgets.

Branded price premiums

While shoppers remain open to paying more for branded products, the report also reveals a clear ceiling on branded price premiums.

One in three surveyed shoppers (33%) would pay up to 10% more for branded than own brand, while 29% would only stretch to 5%.

A further 25% said they would not pay more at all for branded products, rising sharply to 43% among 55-64-year-olds.

With only 11% of surveyed consumers prepared to pay around 20% more, and just 4% willing to pay 30% or more, Shop! ANZ and Vypr believe FMCG brands are being given a clear wake-up call to prove their value.

Sophisticated calculations at shelf

Vypr Chief Revenue Officer Sam Gilding says what this research tells us is that shoppers are making much more sophisticated calculations at the shelf.

“Own brand wins when people feel they are getting smart value without sacrificing quality. Branded products win when they can show they offer something meaningfully better, whether that’s taste, performance or innovation,” he says.

“The challenge is that shoppers are making these decisions quickly and often in the aisle. The brand name may get a product noticed, but it no longer guarantees the sale. Shoppers are looking for proof, and if the premium is not obvious, they are increasingly comfortable walking away.”