Sales of private brands surge in mass retail channel

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Sales of private brands surge in mass retail channel

By Marianne Wilson - 04/22/2019
Store brands are proving to be a powerful weapon for mass merchandisers, warehouse club stores and dollar stores as they compete against both Amazon and other brick-and-mortar retailers.

An analysis of the latest Nielsen data reveals that private label dollar volume in the mass retail channel rose 41% over the last five years, compared to a gain of only 7.4% for national brands. The growth lead is even more pronounced when it comes to units, according to Nielsen, whose data showed that store brands volume climbed by 33.2%, while the national brands inched ahead by less than 1%.

The gains in dollar and unit sales are generating significant market share increases for retailer brands in the mass channel as a result. Unit market share climbed to 23.2% in 2018, up from 18.5% in 2013. Meanwhile, dollar market share advanced to 19.3% in 2018, up from 15.5% in 2013.

Equally impressive, private label growth shows no sign of slowing. In 2018, private label dollar sales advanced 9.8% and unit volume gained 10.6%. In contrast, national brands were flat in dollar volume and gave up 1.3% in units.

This trend is especially significant since the mass channel is also growing faster than traditional supermarkets, noted Nielsen. Over the past five years dollar volume for the mass channel has climbed +12.6%, while unit volume was up +6.4%. Total sales in the mass channel have reached $314 billion vs. $330 billion in supermarkets.

Private label's performance in the mass channel for 2018 nudged Nielsen's store brands figures to positive territory across all outlets combined, despite a lackluster showing for the year in supermarkets and drug stores. For total outlets, dollar sales for store brands were up 1.7% and unit volume rose 0.4%.

Correspondingly, store brands dollar market share in all outlets gained half a point, up to 18.5%, while unit share increased 0.6 points to 22.3%.

During 2018, store brands sales across all outlets measured by Nielsen came in at $128.6 billion, up from $123.1 billion, while units moved up to 46.2 billion from 44.8 billion.

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