Private brands have an ever-greater effect on where retail grocery consumers shop, according to a new study.
Research by the Food Marketing Institute (FMI) and its insights provider IRI found that 46% of consumers say store brands influence their store choice, versus just 35% three years ago.
In addition, private brands are gaining fans across a wider range of demographics and generations as retailers are successfully demonstrating innovation and value. The Power of Private Brands: From the Consumer is the final analysis in a three-part series regarding private brand trends, which all share unique perspectives on the growth potential across categories and channels.
“The solid growth of private brands reflects the success of retailers treating private brands as brands, rather than just following the lead of national and legacy brands,” says FMI Vice President for Industry Relations Doug Baker. “The proof is in consumer satisfaction; shoppers surveyed shared most that they trust the quality of private brands and believe they get a good value. Still, our research indicates that challenges remain for private brands’ image, such as its packaging.”
While Baker noted that grocery retail growth with their private brands has not been keeping pace with other retail channels, private brands led manufacturer brands in dollar sales growth across multiple retail outlets for the second consecutive year, up 5.4%.
The positive momentum is reflected across many private brand categories, geographic regions, consumer generations and income levels. The catalysts are a range of factors, including increased shopper trips, higher dollars per trip, increased velocity, shoppers adding more items to carts, and expanded distribution.
Private brands posted U.S. sales of $153 billion in calendar year 2018 across multiple retail outlets and convenience, according to IRI, which spearheads the data analysis for the FMI Private Brands Leadership Council. The private brands dollar figure represents edible and non-edible segments.