Private Label CPG Dollar, Unit Sales Grow

February 24, 2010

This article is included in these additional categories:

Analytics, Automated & MarTech | Brand Metrics | CPG & FMCG | Food & Restaurants | Retail & E-Commerce

Deviating from a pattern that existed for the last few months of 2009, dollar and unit sales of private label CPG goods both grew during the four-week period ending January 23, 2010, according to research firm The Nielsen Company.

Previously, dollar sales had been slightly receding while unit sales grew.

During the most recently tracked four-week period, annual private label dollar sales of prepacked, UPC-coded CPG goods grew 2.9%, from $6.84 billion to $7.04 billion. Meanwhile, annual unit sales of prepacked, UPC-coded CPG goods increased 3.3%, from 3.15 billion units to 3.26 billion units.

Dairy Posts Only Dollar Loss
Although the combo pack department had the steepest dollar sales drop in December 2009, falling 10.6%, in January 2010 dairy was the only department to experience a dollar sales decline. Dollar sales of dairy products fell 6.3%, from $1.69 billion to $1.58 billion. Private label dairy goods have been reporting disappointing dollar sales since fall 2009, reporting the steepest decline in October and November 2009 and the second-steepest in December 2009.

For the fourth month in a row, alcoholic beverages reported the highest dollar sales increase of any department. Alcoholic beverage sales rose 14.8%, from $11.5 million to $13.2 million. Other departments reporting double-digit sales increases were fresh produce, rising 13.5% from $221.2 million to $251.1 million; and fresh meat, rising 12.2% from $41.5 million to $46.6 million.

Dollar Segment Share Slightly Rises
Annual growth for private label CPG goods in terms of dollar segment share was minimal for the third straight month. Following 0.4% growth in December 2009 and 0.1% growth in the previous two four-week periods, private label CPG goods increased their dollar segment 0.5% in January 2010 compared to January 2009, rising from 17.2% of the segment to 17.7 % of the segment. Branded CPG goods accounted for the remaining 82.3% of the segment.

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The only departments which experienced an annual positive dollar segment share increase of more than 1% were fresh meat, with 2.9%, fresh produce, with 2.3%, deli, with 1.3%, and health and beauty aids, with 1.1%. The only department with negative dollar segment share growth for the fourth straight month was dairy, with negative 0.8%.

Fresh Produce and Meat, Alcohol Lead Unit Sales Performance
Overall annual unit sales grew 2%, from 3.22 billion units to 3.29 billion units. In a partial repeat of departmental unit sales performance from the previous four-week period, fresh produce, fresh meat and deli were the top three departments in unit sales growth. Fresh produce and fresh meat were the top two departments last month, with alcoholic beverages coming in third.

Fresh meat unit sales grew 21.7%, from 8.8 million units to 10.7 million units. Fresh produce unit sales increased 19.9%, from 85.2 million units to 102.2 million units. Deli unit sales rose 13.8%, from 29.4 million units to 33.4 million units. No department experienced negative unit sales growth for the month.

Unit Segment Share Grows 0.5%
Unit segment share of private label CPG goods grew 0.5% compared to January 2009, from 22.2% to 22.6 % of the segment. Annual unit segment share performance matched annual dollar share segment share performance last month, after being stronger than dollar segment share performance since it initially spiked from about 19.75% to 20.75% in mid-May 2009. Following a second spike from about 21.5% to 22% in late January-early February 2009, at the low point of the current recession, unit share dipped below 21.5% in mid-May 2009 but rebounded in mid-June 2009.

Fresh produce led all departments in unit segment share growth with a 2.8% improvement. Fresh meat followed closely behind with 2.7% growth, deli grew 1.4%, and health and beauty aids grew 1.2%.

Consumers Favor Cheaper Liquor
US consumers consumed a slightly higher quantity of liquor in 2009 as compared to 2008, but traded down on quality, according to the Distilled Spirits Council. Liquor sales by volume grew 1.4% between 2008 and 2009, but liquor revenues remained flat at $18.7 billion in 2009.

When 2009 liquor sales volume is broken down by price category, the growing dominance of value-priced brands (including private label) becomes clear. In 2009, U.S. consumers purchased 75.9 million value-priced nine-liter cases of liquor, 40.6% of 186.9 million total cases purchased.

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