07/10/2023

Store-Brand Dollar Share Reaches Record Level

At midway point of the year, PLMA reports continued surge in sales

Senior Editor

Store brand dollar sales and market share continue to expand, as retailers like Walgreens expand their offerings and tout product value and variety.

Private label products, already on a roll, continue to gather momentum in the marketplace. The Private Label Manufacturers Association (PLMA) shared fresh data from Chicago-based insights firm Circana showing that dollar sales of store brands outpaced national brands during the six-month period ending June 18. Moreover, store brands' dollar increased to a record level (18.8%) for the first part of 2023.

According to data conducted for PLMA by Circana, private label sales grew 8.2% on a year-over-year (YoY) basis during that time, while national brand sales rose 5.1%. Beverages led the charge, climbing 19% on a YoY basis, with notable gains also coming from general food (+16%) and refrigerated products (+16%).

Unit sales data tell a similar story. While unit sales from national brands dropped 3.4% during the first half of 2023, there was only a slight 0.5% dip among store brands.

Mary Ellen Lynch, principal at Circana, said that the trajectory of the category is likely to continue to go up in the wake of market conditions that include stubborn inflation, recession odds and changes in consumers’ personal finances. "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,” she pointed out.

Peggy Davies, president of PLMA, added that store brand loyalty continues to build on itself as consumers have tweaked their behavior over the past few years and retailers and manufacturers have responded with more selections. “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,” she explained. “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."

Bearing out the data, many retailers have posted strong private label sales in the past several months. Walmart, for example, recently reported that more than 20% of its sales come from private label programs. As part of its first quarter recap released in June, Kroger shared that private label sales rose nearly 5% during that period.

Kroger launched 223 new Our Brands products during the first quarter. Other retailers are widening their store brand portfolios as well: Southeastern Grocers is introducing a collection of clean label private label products, while Natural Grocers by Vitamin Cottage, Inc., is adding new sparkling spring water and Walgreens is entering the breakfast category with Nice! brand cereals, granolas, instant oatmeal and oats.

Bentonville, Ark.-based Walmart operates more than 10,500 stores and numerous e-commerce websites in 20 countries. Walmart U.S. is No. 1 on Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. Serving over 11 million customers daily through digital shopping and retail food stores under a variety of banner names, Cincinnati-based Kroger is No. 4 on The PG 100. Based in Lakewood, Colo., family-operated Natural Grocers operates 166 stores in 21 states and is No. 95. Deerfield, Ill.-based Walgreens, which operates nearly 9,000 retail locations across the United States, Puerto Rico and the U.S. Virgin Islands, is No. 5.