07.11.23
According to Private Label Manufacturers Association (PLMA), store brands (also known as private brands) continued to post record sales and share in the first half of 2023 as they have for the past 18 months.
Store brands outperformed national brands in several key metrics.
Firstly, store brand dollar sales across all U.S. retail outlets increased 8.2% vs. a gain of 5.1% for national brands, according to Circana data from the six-month period ending June 18, compared to the same six-month period in 2022.
Furthermore, in unit sales for the six months, store brands were nominally even, down 0.5%, while national brands fell 3.4%. That gap may be lengthening, claims PLMA. For the month of June alone, the most recent Circana report finds that while store brand units were off slightly at minus 0.6%, national brands dropped 5.1%.
As a result of this performance, store brand dollar share rose to a record 18.8% for the half-year, while unit share moved up to 20.5%, 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.
Consumers are Tightening Household Budgets
"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.
“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 non-food to take advantage of the flow of new store brand customers."
Among the major departments that Circana tracks for PLMA, the beauty category experienced a store brand dollar sales gain over the past 52 weeks of 5%.