Private Brand Sales Set New High

2016 PLMA YearbookPrivate brand sales reached $118.4 billion in 2015, an all-time record and an increase of +$2.2 billion over the previous year. In the past two years alone, annual sales are up +5%, or +$5.4 billion, in the major retail channels, according to the industry trade association PLMA’s 2016 Private Label Yearbook.

Store brands dollar share came to 17.7%, also the highest mark ever. Across all outlets combined private label sales grew +2%, a performance that equaled that of national brands, which also rose +2%.

Screen Shot 2016-04-11 at 4.18.08 PMIn unit sales, both store brands and national brands were off fractionally, less than a half percentage point each. Unit sales of store brands were almost 44 billion, nominally on par with last year. As a result, store brand unit share held at 21.1%.

The PLMA Private Label Yearbook compiles sales data provided by Nielsen for the 52 weeks ending December 26, 2015. The industry annual is published online at www.AskPLMA.com. Nielsen sales and market share statistics are reported for more than 700 food and nonfood product categories.

Looking at supermarkets, total sales of private brand were $62.5 billion, roughly even with the prior year. Over a two-year period, sales are up in the supermarket channel by +2%, or $1.1 billion. With unit share at 22.9%, nearly one of every four items sold in the country’s supermarkets last year was a store brand. As for drug chains, store brand dollar sales rose nearly a percentage point to $8.4 billion last year, while national brands fell about a point.

Figures for all outlets come from total U.S. supermarkets with annual sales over $2 million, drug chains with annual sales over $1 million, mass merchandisers, club and dollar stores channels, and military exchanges.

Looking beyond these traditional outlets and the data available from Nielsen, a more comprehensive figure for annual store brand sales in food and non-food consumables would include an estimated $20 billion or more in revenues from chains that range from no-frills discounters like Aldi and Save-a-Lot, to specialty chains such as Whole Foods and Trader Joe’s, as well as convenience store. If counted, these outlets would produce a grand total approaching $140 billion in total sales.

Even that total does not take into consideration store brand products sold by chains specializing in office supplies; hardware, tools and do-it-yourself; home improvement, home decor and domestic goods; consumer electronics, baby care, pet care, toys, personal care and sporting goods. These are just a few of the non-grocery retail channels that are marketing a growing variety of store brand items.

Private brand continues to represent outstanding value for consumers. Shoppers could save an estimated $44 billion a year by buying store brand products over national brands, according to a study by the National Bureau of Economic Research, while market basket research by PLMA consistently reveals that shoppers can save about one-third on a basic food and household items in a typical supermarket by opting for the store brand over national brands.

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Christopher Durham
Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.