Store brand sales up nearly 4% this year, doubling the growth rate of CPGs, per IRI report
Consumers are loving the value that private brands provide, according to market researcher IRI’s “Q3 2019 Consumer Connect” report, which found that U.S. consumers across ages and demographics are buying more private label goods, and have shifted their attitudes and behaviors around purchasing such products.
While the report showed private label sales decelerated from the nearly 6% pop in 2018, private label sales did increase by nearly 4% in 2019, a number even more impressive when factoring in that consumer packaged goods (CPG) sales only increased by about 2%, the study showed.
The consumer survey reported that 99.9% of shoppers buy store brands today, flowing into more than 124 million households throughout 2019. The research said private label is particularly strong among younger shoppers and mid- to lower-income shoppers.
Key to the report is that consumers continued to buy private label goods during a time when they felt financially stable. The study said that 57% of respondents feel their household’s financial health is in good shape. Looking at groceries alone, only households making less than $35,000 annually felt it was a struggle to buy groceries during 2019, and with that group only 54% felt as such.
The study did find that more consumers are looking to save money in the event there’s an economic downturn, with 42% of respondents growing their savings in the past six months — measurement that’s four points higher compared to last year.
Store brands are also having a strong influence on where shoppers choose to shop, the study said, with mass, club/warehouse, specialty grocery and traditional grocery channels all seeing double-digit growth from respondents compared to 2016 when asked if private brands influence their store decisions. The specialty grocery channel leads the way with 67% of consumers saying private brands influence their decision to shop a store, a leap by 25 points compared to 2016.
“While shoppers across generations and income groups in 2019 are undoubtedly more price conscious, they are turning to private label because of their positive perceptions of the value,” said Joan Driggs, vice president of content and thought leadership at IRI, in a press release. “Shoppers are buying private brands because it makes them feel good to save money without sacrificing taste, selection or quality. The improved consumer perception of private label value is having a growing influence on store choice, with many leading retailers offering premium private label selections.”
One area the study showed where private label goods need an upgrade is in packaging, with nearly 20% of respondents saying the packaging makes products look of lesser quality than the national brand counterparts.
A dive into specific categories reveals that private branded non-edible departments are showing little growth while the frozen and beverage categories are outpacing total category and national brand sales, the study said.