Retailer Daily

Private Label Popularity Leaps

A new study on consumer shopping habits provides further evidence that private label brands are becoming increasingly popular, and their popularity will remain even after the economy turns around. “Store Brands and the Recession,” an ongoing study conducted by the Private Label Manufacturers Association (PLMA) and GfK Custom Research North America, indicates that 91% of respondents said they will keep buying store brand products after the recession ends, while only 8% said they will stop buying these products once the economy turns around. In addition, 90% of respondents said private label products are just as good as, or better than, national brand products. While the study indicates private label shopping habits will outlast the current recession, it also reveals that as the recession continues, consumers continue hardening their private label buying habits. More than half of respondents, 54%, said the recession is an important factor in their decision-making, and 32% said it is very important. The poll also found that 35% of respondents are trying store brand products in categories where they had previously only purchased national brand items, and slightly more than 30% said they are now buying more store brand products than they were a year ago. These results echo other recent research findings. A report on private label food and beverage trends in U.S. households by NPD Group found in 2008, 24% of all food and beverages served in U.S. homes were store brands, up from 18% in 1999. Furthermore, 97% of all U.S. households consumed private label foods and beverages on a regular basis last year. In addition, research from MediaBuyerPlanner indicates CPG company Procter & Gamble reported a 5% dip in global sales volume for its Q3 2009 (ended March 30, 2009), and analysts predict earnings per share may drop 5% in Q1 2010 (starting July 1, 2009), with private label goods the most likely beneficiary. Numerous retailers are expanding or introducing new lines of private label merchandise this year, some in partnership with manufacturers or celebrities. Some of the bigger names include Wal-Mart, Target, Best Buy, 7-Eleven, Sears, and JCPenney. Store Brands and the Recession is based on GfK's nationwide poll of nearly 800 main household grocery shoppers.