Private Label CPG Dollar Sales Rise, Unit Sales Fall

May 13, 2010

This article is included in these additional categories:

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

Maintaining a trend set in the previous four-week period, private label CPG dollar sales rose for the fourth straight time during the four-week period ended April 17, 2010, but unit sales slightly fell, according to research firm The Nielsen Company.

Nielsen figures indicate that private label CPG dollar sales rose 1.1% on an annual basis, but unit sales fell 2.3%.

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Dollar Sales Total $6.66B
Dollar sales of prepackaged, UPC-coded CPG goods were $6.66 billion during the most recently tracked four-week period, compared to $6.58 billion during the same period a year earlier. Combo pack sales, the dollar sales leader in the previous four-week period, underwent an especially strong 47% sales growth, rising from $12.5 million to $18.4 million. Fresh meat trailed with a 15.8% annual sales increase, rising from $38.4 million to $44.5 million. Alcoholic beverages continued a monthly trend of strong annual sales growth begun in fall 2009, growing 12.5% from $11.9 million to $13.3 million. Fresh produce sales also grew 12.5%, rising from $218.8 million to $246.2 million.

Dry grocery dollar sales had the largest year-over-year sales decline by percentage (1.8%) of any department, falling from $2.35 billion to $2.3 billion. Dairy sales, which have been setting a negative growth trend since fall 2009, fell 0.6%, from $1.48 billion to $1.47 billion. Frozen foods sales also dropped 0.6%, from $648.8 million to $644.8 million.

Dollar Segment Share Incrementally Grows
Annual growth for private label CPG goods in terms of dollar segment share was a fraction of 1% for the sixth straight four-week period. Dollar sales of private label CPG goods rose 0.4%, from 16.7% of the segment to 17.1%. Branded CPG goods accounted for the remaining 82.9% of the segment.

The only departments which experienced an annual positive dollar segment share increase of 1% or more were combo pack (4.4%), fresh meat (3.3%), and fresh produce (1%). Dry grocery had flat dollar segment share growth and dairy broke six straight four-week periods of negative dollar segment share growth with a 0.4% increase.

Unit Sales Fall to 2.99B
Total unit sales for the four weeks ended April 17, 2010 were 2.99 billion, down from 3.06 billion during the equivalent four-week period in 2009. Combo pack unit sales increased 25.2%, from 1.97 million units to 2.46 million units. Fresh meat sales grew 17.9%, from 8.49 million units to 10 million units. Fresh produce sales increased 10.5%, from 85.4 million units to 94.4 million units.

Four departments reported negative unit sales growth. Dairy unit sales declined 5%, from 733.5 million units to 697.1 million units. Dry grocery unit sales dropped 3.4%, from 1.47 billion units to 1.42 billion units. Frozen food unit sales fell 0.9%, from 232 million units to 230 million units. Non-food grocery unit sales fell 0.3%, from 233 million units to 232.3 million units.

Unit Segment Share Drops 0.2%
Following a four-week period of flat performance, unit segment share declined 0.2% during the four weeks ended April 17, 2010, with private label CPG goods accounting for 21.2% of the segment, as opposed to 21.4% a year earlier. Branded CPG goods accounted for the remaining 79.8% of the segment.

Fresh meat led all departments with 3% unit segment share growth, followed by combo pack (2.8%) and general merchandise (1.5%). Dairy lost 0.9% unit segment share, with dry grocery losing 0.5%.

Private Label Brands Make Gains in Weak Economy
Private label brands are proving consistently popular with consumers looking to save money in a weak economy, according to other recent research from Nielsen.

Private label brands captured a 20 unit share or higher in 48 of 117 categories analyzed by Nielsen during the 52 weeks ended March 20, 2010. Private label brand share fluctuated widely by department, from a high of 40% for the dairy department to a low of less than 1% for alcoholic beverages. Nielsen analysis indicates this mirrors the typical pattern of store brand strength in commodity categories like milk, eggs and sugar, as well as those with little “consumer-perceived” differentiation such as first aid or wrapping materials.

In categories with a history of strong brand marketing support like beer and candy, or those with a high demonstrated level of innovation such as deodorants and detergents, store brand share remains relatively weak and undeveloped. In these categories, Nielsen advises retailers to attempt to take market share away from smaller national brands with lower marketing budgets.

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