At its annual trade show in Chicago this week, the Private Label Manufacturers Association released a survey revealing that store brands are becoming increasingly popular to American consumers. Among the survey's results were:
- 32 percent of the products in a shopping cart were private label items;
- 41 percent of shoppers consider themselves frequent store brand buyers;
- 70 percent of consumers agreed that private label brands are just as good as national brands;
- Middle and upper class consumers are more likely to be purchasing private labels in the upcoming year than lower-class citizens.
The survey, conducted by Ipsos MORI, also concluded that, "The popularity of grocery store brands has lent a halo effect to non-grocery private label products" and proved that private labels are being accepted in grocery stores. Almost two-thirds of consumers said new brands and a wider variety of store brands would encourage them to buy even more.
Specialty chains and mega-retailers are growing; 45 percent of consumers shop at supercenters and warehouse clubs, as well as supermarkets.
The full report released by PLMA, STAR POWER: The Growing Influence of Store Brands in the U.S., highlighted 10 trends in store brand programs:
- Profound changes are taking place in ways consumers shop.
- The role of mega-retailers and specialty chains is growing.
- Consumer awareness increases the likelihood private label will be purchased.
- Market baskets are filling up with store brands.
- Frequent store brand shoppers account for 41 percent of consumers.
- Perception of store brand quality and performance has reached new levels.
- Popularity of grocery store brands spreads a halo effect to non-grocery private label products.
- Americans in middle and higher income brackets are more likely to increase their purchase of store brands than those in lower range.
- Future store brand growth is linked to retailer initiatives.
- The U.S. is drawing closer to Great Britain on consumer attitudes toward private label.
Discussion Question: What does the near-term future hold for store brands?
While this year's PLMA show wasn't quite as vibrant as the last one I went to in 2002, it was still very active, and the level of retailer and wholesaler interest was very high. The two buyers I spent some time with both said senior management is putting more resources behind their programs, even hiring extra staff for the one buyer to conduct market research separate from the rest of the merchandising organization. - Ronald Margulis