Private label sales grew faster in specialty food stores such as Trader Joe's and Whole Foods than at supermarkets between 2005 and 2009, according to the Private Label Food and Beverage in the U.S. report by Packaged Facts.
According to the report, private label dollar sales grew to $87 billion last year with store brands accounting for 17 percent of all food and beverages sold at retail. That 17 percent figure was up from 14 percent at the beginning of 2005.
Private label sales grew at an annual compound rate of 14 percent between 2005 and 2009 in specialty grocers. Sales grew nine percent in club stores and four percent at traditional food retailers over the same period.
Don Montuori, publisher of Packaged Facts, said, "Private labels entered into new territory where the additional power of the retailer name and its inherent benefits are aiding private labels to emerge as brand name. Store reputation alone may be the driving force in the success of chains, such as Trader Joe's and Whole Food Markets, in attracting more affluent consumers to the category."
Discussion Questions: How effective are traditional supermarkets at private label brand building? What lessons should traditional grocers take from the growth of private label foods and beverages at chains such as Trader Joe's and Whole Foods?