Private Label Sales Continue Upward Trends
NEW YORK — Private label sales continue to hit their stride.
For the first half of 2023, store brands again posted record sales and share — similar to the past 18 months, according to a report from the Private Label Manufacturers Association (PLMA). The success of store brands at the checkout includes outdistancing national brands in two key metrics.
Store brand dollar sales across all U.S. retail outlets increased 8.2 percent vs. 5.1 percent for national brands year over year for the six-month period ending June 18, according to Circana data. That extends store brands' powerful two-year run. Measured against the first six months of 2021, dollar sales during the same period this year improved by 16 percent, or roughly $17 billion ($91 billion in 2021 vs. $108 billion in 2023).
Circana provides PLMA members and retailers with exclusive market insights and monthly sales data of hundreds of product categories and subcategories on the company's Unify+ platform, a data visualization tool on plma.com.
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In unit sales for the six months ended June 18, private brands were nominally even, down 0.5 percent, while national brands fell 3.4 percent. That gap may be lengthening, according to Circana. For the month of June alone, store brand units were off slightly at -0.6 percent and national brands dropped 5.1 percent.
As a result of this performance, store brand dollar share rose to a record 18.8 percent for the half-year, while unit share rose to 20.5 percent, 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 lists," said Mary Ellen Lynch, principal at Circana.
PLMA President Peggy Davies agreed that the headwinds of an uncertain economy weigh heavily on consumers' minds. Plus, many marketers are holding on to recent inflation- and supply chain-related price hikes.
Most importantly, store brands have benefitted from several years of unprecedented consumer trial, which research says is the industry's best friend.
[Read more: Private Label Sales Reach Nearly $229B in 2022]
"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 nonfood to take advantage of the flow of new store brand customers."
Among the major departments that Circana tracks for PLMA, the beverage category experienced the largest store brand dollar sales gain over the past 52 weeks, up 19 percent, followed by general food and refrigerated (both ahead 16 percent), then frozen and general merchandise (both up 8 percent).
Home care (7 percent), beauty (5 percent) and health (3 percent) were also winners. In the two smallest departments, dollar sales in liquor were ahead by 20 percent, but in tobacco they fell 13 percent.
Departmental unit sales followed much the same pattern. In the major sections, beverages led the pack, up 6 percent in store brand units, followed by refrigerated and general food (both up 5 percent), then home care (up 4 percent), health and general merchandise (both 2 percent). Frozen came in even and beauty shed 2 percent, while liquor was up 22 percent and tobacco was down 14 percent.
The Private Label Manufacturers Association is a nonprofit trade organization founded in 1979 to promote the store brands industry. With executive offices in New York and International Council offices in Amsterdam, PLMA represents more than 4,500 member companies worldwide.