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Private label scored strong gains across all major U.S. retail channels last year as more and more consumers switched from national brands and drove store brands to all-time highs in both volume and total revenue, in addition to market share, according to latest industry statistics published in PLMA’s 2010 Private Label Yearbook.
On the heels of a powerful growth surge for store brands in 2008, sales of the products increased again in 2009 by 1.8 billion units, while national brand units fell -2.1 billion. Along with the conversion of a full percentage point in unit share from national brands to the private label column, store brands added $2.7 billion in value to attain $86.4 billion in total sales. National brand sales grew $1.6 billion, but those gains were largely, if not entirely, the result of higher prices.
While overall sales for the nation’s retail chains reflected the economy’s overall sluggishness — dollar growth in all three mainstream channels, supermarkets, drug chains and mass merchandisers — was just 0.8 percent, while unit sales dipped -0.2 percent — store brands were standout performers.
In supermarkets, store brands hit an historic high of 23.7 percent in unit share. Private label units rose 6.4 percent for the year, vs. national brands’ decline of 1.7 percent. The growth in store brand units of 1.7 billion more than offset the erosion of national brands by 1.5 billion, leading to a net gain for the channel as a whole and stemming a multiyear trend of overall unit losses in U.S. supermarkets.
On the revenue side, store brands accounted for 90 percent of all gains in supermarkets, adding $1.5 billion in new sales (2.9 percent), while national brands were virtually flat, rising just 0.1 percent. Further, the decline in national brand units suggests that even their modest $200 million sales gain was due to price inflation. Overall, store-brand sales in supermarkets came to $55.5 billion and dollar market share ascended to 18.7 percent — both new all-time highs.
Since its 1992 debut, the PLMA’s annual yearbook’s coverage has increased from fewer than 200 product categories to over 700, reflecting the growth and penetration of private label products across retail channels, according to Brian Sharoff, president of New York-based PLMA.
“The past year has even greater significance, since it is the first full year of the impact of the recession,” noted Sharoff. “Not surprisingly, the statistics document the amazing increases in store-brand popularity. But as most market researchers know, the growth of store brands is by no means a recessionary phenomenon. Its success began years before the current downturn and is rooted in increasing assortment, quality ingredients, innovative product concepts and retailer commitment.”
Data for the Yearbook was compiled by The Nielsen Company for the 52 weeks ending Dec.26, 2009. The 2010 Private Label Yearbook is distributed to at no charge to PLMA members as well as to retailers and wholesalers. All others may buy the publication for $1,500 by contacting the organization at (212) 972-3131.