Sales of private-label goods hit new record
Consumers continue to gravitate toward store brands.
Store brands posted record sales and share for the first half of 2023, according to a report from the Private Label Manufacturers Association (PLMA).
Dollar sales of store brands across all U.S. retail outlets rose 8.2% during the first half of the year compared to a gain of 5.1% for national brands, according to Circana data from the six-months ending June 18 (Circana, formerly IRI and The NPD Group, provides PLMA members and retailers with exclusive market insights and monthly sales data of hundreds of product categories and sub-categories on the company's Unify+ platform.)
In unit sales for the six months, store brands were nominally even, down 0.5%, while national brands fell 3.4%. That gap may be lengthening. For the month of June alone, the most recent Circana report finds that while store brand units were off slightly at minus 0.6%, national brands dropped 5.1%.
Store brand dollar share rose to a record 18.8% for the half-year, while unit share moved up to 20.5%, also a new high. Total store brand dollar sales for the first six months of this year were $108 billion and unit sales were 26.4 billion. Totals last year were $100 billion in dollar sales and 26.5 billion in unit sales.
"These numbers may grow as student loan repayments resume and borrowers of all ages lean further into strategies to tighten household budgets, including adding more value-friendly store brand items to their grocery list,” said Mary Ellen Lynch, principal at Circana.
PLMA president Peggy Davies agreed that the headwinds of an uncertain economy weigh heavily on consumers' minds. Also, many marketers are holding on to recent, inflation- and supply chain-related price hikes.
Most importantly, Davies added, store brands have benefitted from several years of unprecedented consumer trial, which research says is the industry's best friend.
“Having opted for a store brand over the national brand for the first time, there's a strong likelihood the shopper will stick with the store brand,” said Davies. “In addition, we are also seeing retailers doubling down on product innovation in food and non-food to take advantage of the flow of new store brand customers."