Despite challenges, overall private label sales are increasing, which is common during inflationary periods. According to IRI’s 2021 Consumer Demand for Private Brands report, from October of 2019 to October of 2021, the share of store brands in total grocery sales had shrank from 17.5% to 17.3%, but total sales rose from $828 billion to $963 billion.
While the overall market share of private label brands as a whole shrank slightly during the period, certain categories of store brands have seen major gains during the past two years. Top growing edible store brands categories include shelf-stable breakfast foods (+274% vs. 2YA), ham (+736% vs. 2YA), sports drinks (+182% vs. 2YA) and more. Top growing non-edible categories include hair conditioner (+196% vs. 2YA), baby toys, gifts and furniture (+131% vs. 2YA) and external pain relieving rubs (+110% vs. 2YA).
During an inflationary 2021, store brand product sales hit a record $199 billion in 2021, according to data from IRI provided to the Private Label Manufacturers Association, a 1% total sales growth from 2020. Private label saw growth in six categories: Refrigerated foods saw store brand sales increase by 0.7%, followed by general merchandise (+1.7%), health care products (+0.2%), frozen (+0.8%), produce (+11.4%), and beverages (+2.7%). The growth didn’t stop when the calendar changed either. In January of 2022, private label sales grew 4.2% in dollar volume across all U.S. retail channels, compared to the same period in 2021. The increase was about equal to the 4.4% growth of national brands, according to the IRI data.
“Private label is poised to benefit as we begin to see high inflation in consumer packaged goods,” said Krishnakumar “KK” Davey, president of client engagement at IRI. “ Private label lost share during the pandemic, but is seeing improving trends now with most retailers. After many years of investing, retailers have a more-developed private label portfolio now with presence in most categories and multiple price tiers that contributes to slower private label growth, but a couple retailers are renovating or expanding their offerings and gaining share.”