Consumers are continuing to purchase private label products at an increasing rate, according to new research from The Nielsen Company.
The “U.S. Store Brand Development” found that both private label dollar and unit sales significantly increased for the 52-week period ending July 11, 2009 versus the prior year.
Dollar sales grew by 7.4 percent to $85.9 billion within food, drug and mass-merchandisers (including Walmart), with shares recorded at 16.9 percent. This reflects an increase of 0.7 points from the previous year. Growth peaked in 2008 but then slowed slightly in 2009 with falling commodity prices and increased retail discounting.
Unit sales similarly experienced high growth during the same period. Sales increased by 5 percent to 39.5 billion units and unit shares rose by 1.3 points (a total of 21.5 percent).
All store brand food and non-food categories experienced better performance versus brands, but edible departments saw the greatest uptick in both dollar and unit sales.
Top dollar growth categories were frozen pizza and snacks (38 percent), flour (36 percent), and dry vegetables and grains (31 percent), and dry grocery and dairy departments accounted for 59 percent of total sales. Baby food (37 percent), candles and incense (23 percent), frozen pizza and snacks (22 percent), cheese (16 percent) and flour (15 percent) topped unit sales.
The importance of food and at-home meals in this down economy has led to strong growth for both branded and private label offerings in some basic food categories such as flour (36 percent store brand growth compared to 17 percent branded), dry vegetables and grains (31 percent to 20 percent), salad dressing and mayo (30 percent and 8 percent), pasta (27 percent to 15 percent) and baking mixes (22 percent and 10 percent).
“When categories are sorted by store brand share, from high to low, some patterns emerge,” said Todd Hale, SVP, Consumer & Shopper Insights at Nielsen. “Store brand performance and share is strongest in commodity categories. Milk, fresh eggs, sugar & substitutes and canned vegetables top the list). Where store brand share is the lowest is among categories where we see strong marketing support for top brands including candy, gum, beer and those where a high-level of innovation occurs like detergents, deodorant, cosmetics.”