Many Shoppers Sticking With Store Brands

Private-label growth continues to outpace national brands, PLMA says

CPG private-label shpper (CSP Daily News / Convenience Stores)

NEW YORK -- Store brands have extended their multiyear period of growth, outpacing national brands in dollar and unit gains and setting new share records in all major U.S. retail channels, according to Private Label Manufacturers Association's 2014 Annual Private-Label Yearbook.

The development that had been touted in some quarters as inevitable--shoppers' returning en masse to big brands--failed to materialize for yet another year, PLMA said. Instead, it was business as usual. Data provided to PLMA by The Nielsen Co. for the 52 weeks ending Dec. 27, 2013, showed that national brands ceded precious market share as consumers continued to reach for quality and value in store brands.

In supermarkets, unit and dollar shares rose to 23.4% and 19.4%, respectively. In drug chains, unit market share advanced to 17.3% while dollar share increased to 16.4%. Across all outlets combined, which includes Wal-Mart, mass merchandisers, the club channel, dollar stores and military exchanges, shares moved up to 21.2% in units and 17.5% in dollars. All share marks are records.

Since 2011, annual sales of store brands in supermarkets have increased 3%, or $1.6 billion, and in drug stores they have climbed 9%, or $700 million. In all outlets combined, annual sales have grown 5%, or $5.3 billion.

Some observers have been warning for years that store brands had their moment and recent share gains would hold steady or even decline as economically relieved consumers flocked back to brands.

But a funny thing happened on the way to what big CPG companies would consider marketplace normalcy: consumers balked. During financially pinched times many had turned to store brands and had come to like, even prefer, them. A large segment of these shoppers were not going back to the big brands, PLMA said.

"In response to the trend, retailers across the country are freshening private-label offerings and rolling out new products and whole new lines to their shelves," PLMA president Brian Sharoff. "Looking ahead, store-brand portfolios of leading retailers will likely accelerate their emphasis on consumer-focused positioning."

"For the first time, our 22-year-old reference moves from print publication to an exclusively online resource, where store brands performance can more easily be examined and tracked category by category and quarter by quarter, across nine U.S. regional divisions and by channel."

The annual compilation has become the benchmarking standard for retailers and suppliers, where Nielsen sales and market shares statistics are reported for more than 700 product categories.