The Rise Of Premium Private Brand & Discount Retailers

    In its latest blog post, data analytics firm Nielsen takes a look at the development or premium private brand products and their impact on discount retail. The analysis uses the words “store brand” and “private label” and “retailer brand” interchangeably. We firmly believe that they each have different meanings and implications, however, we have maintained their usage.

    I would love to see Nielsen take a deeper dive and present insights not simply on “private label’ or a price tier but instead on the brands which each retailer owns. There must be different insights for Krogers Simple Truth then there would be Target’s Smartly or’s Prince & Spring. Until we tap into the richness of each retailer’s private brand portfolio and how each brand is engaging customers we can not discover the potential of Private Brand.  


    Stigma and stereotypes have faded for store brands and name brands, respectively. The premium assortment of products in the retailer-branded portfolio continues to expand. And though discount retailers have historically focused on store brands (or, private labels as we often refer to them), many have a renewed interest in name brands amid demand for premiumization. It’s an exciting time for all where private labels descend on mainstream retail and name brands resurge as mainstays to discount retail strategy.

    From a sales perspective, the rise of private label is clear. Across U.S. outlets, they have amassed over $143 billion in sales over the latest year, a figure that’s up nearly $14 billion since 2015. While name brand products have made great inroads this year, up 2% in sales, growth has been constrained by flat consumer spending intentions, which have leveled off relative to store brands.

    Today, consumers are much more willing to splurge for store brands than they would for name brands. Forty-percent of surveyed Americans say they would pay the same or more for the right store branded product, while only 26% of those surveyed feel that name brands are worth the extra price. Store brand sentiment in this case has seen substantial improvement from 2014, but consumers remain relatively unchanged in their willingness to splurge for name brands.

    The rise of higher-end store brand products has come hand-in-hand with consumers’ inclination to spend more on store brands. The premiumization of private label really comes to life when we look at products by price tier. Analyzing individual UPC price points, we created a five-tier distribution that isolates the most premium- and discount-oriented groups of products. Discount products still represent the majority of store brand sales in America, but they have ceded three share points in the last three years. Premium tiers of private-label products have grown in this time, now representing over 19% of sales. And as we saw earlier, consumers are more willing than ever to foot the bill for the right store branded products.

    Read the entire article.

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