CHICAGO — Private-brand dollar sales grew 3.8% in 2019, twice the growth of national brands, according to an IRI Consumer Connect Survey.
The Chicago-based retail market research firm also found that consumers turn to private brands for better value and better price. In a 2019 Private Label Manufacturers Association survey, two-thirds of consumers said that in general, store brands they bought were just as good, if not better, than the national version of the same products.
“While shoppers across generations and income groups in 2019 are undoubtedly more price-conscious, they are turning to private label because of their positive perceptions of the value,” said Joan Driggs, vice president of content and thought leadership for IRI. “Shoppers are buying private brands because it makes them feel good to save money without sacrificing taste, selection or quality. The improved consumer perception of private-label value is having a growing influence on store choice, with many leading retailers offering premium private-label selections.”
For the 52 weeks ending Nov. 3, sales of private-label brands in convenience stores totaled $3.89 billion, while national brand sales in c-stores totaled $156.12 billion. In all channels, private-label brands took in $129.57 billion in that same time period, while national brands took in $703.67 billion, according to IRI.
IRI presented these insights and more in Beyond Price, Consumers Find Value in Private Brands, its Q3 2019 Consumer Connect report.
Highlights from the report:
- Millennials demonstrate the highest adoption of private-label products, increasing 10% in 2019 from 2018. Demonstrating value, quality and innovation to millennials are key as they move into their higher-spending years, according to the report.
- Home care is showing above-averages growth in private-label brands, while growth rates are slowing across edible departments.
- Packaging is a barrier for millennials and light buyers. In 2019, 18% of respondents said packaging makes it look of a lesser quality than the national brand. Beverages also continue to be a challenge for growth.
- Private brands have a growing influence on store choice: Forty-six percent of respondents said store brands are “extremely” or “very influential” in store choice.
- Customers are willing to pay more for premium-quality products.