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Private label sales surge

Store brand revenues are rising as shoppers seek lower price alternatives

The surge in grocery prices is having a powerful, and positive, impact on the merchandising of private label products.

The typically lower cost of store brands contributed to an 11.3% sector sales increase in 2022, resulting in record revenues of  $228.6 billion from all U.S. retailing channels, the New York-based Private Label Manufacturers Association (PLMA) reported in its 2023 Private Label Report.

The private label sales increase was nearly double the 6.1% gain of national brands, which had dollar sales of $981.1 billion, the report said. 

Store brand revenues also accounted for 29% of the total industry sales increase, which rose 7% last year to a record $1.21 trillion, the PLMA said. Private label’s dollar share increased 0.7 points to 18.9%.

Private label unit sales, however, were down 1% to 58.8 billion, Yet, with a 4.1%-unit sales decline for national brands, and an overall 4% industry decrease, store brands unit share rose 0.6 points to 20.5%.

Industry-wide unit sales for 2022 totaled 287.2 billion, a 10.4 billion decline from 2021.

The store brand revenue gains, meanwhile, were spread across the store.

The strongest categories include beverages (with dollar sales up 19.1%), deli prepared (17.3%), refrigerated (17.1%), liquor (15.6%), general food (14%), floral (13.5%), bakery (12.6%), produce (11.9%), and deli meat (10.3%). The lone decrease was for tobacco (down 10.9%).

Food products with healthy dollar sales gains were fresh eggs (up 49.6%), butter and butter blends (26.6%), shortening and oils (26.5%), processed poultry (25.7%), bottled water (22.8%), pastry and doughnuts (19.3%), and cookies (18.3%).

Non-food categories with significant private label sales increases include cups and plates (up 18.3%), pet food (16.8%), and toilet tissue (14.8%).

Other pet product categories with increases include cat and dog litter (20.3%), and pet treats (20.3%).

Also registering substantial gains were hair appliances (up 95.6%), drinkware (81.8%), foil pans (35.6%), women’s fragrances (23.8%), skin care (21.2%), and laundry detergent (20.7%).

The report noted that the 2022 growth in store brand revenues follows a pattern of shoppers purchasing more private label selections during period of economic difficulties, such as the 2008 recession and the years following.

Another driver was responsiveness by manufacturers and retailers to the greater number of shoppers who, in the wake of the pandemic, are more concerned with how products are made and what’s in them, the report said. That includes raw ingredients, holistic health attributes, and sustainability elements involving the manufacture, use, and disposal of products.

“As they continue to come to the shelves, more and more new and innovative store brand products are meeting these and other pandemic-influenced consumer demands,” the report said.

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