US Private Label Dollar Share Climbs Since ’05

March 10, 2011

nielsen-private-label-dollar-share-canada-v-us-mar11.gifPrivate label dollar share climbed in the US between 2005 and 2010 while declining in Canada, according to data from a new Nielsen Company report. “The Rise of the Value-Conscious Shopper” indicates private label dollar share in the US during those five years increased almost 14%, from 15.3% to 17.4%.

In contrast, Canadian private label dollar share dropped about 6%, from 19.3% to 18.1%. During 2010, store brands brought in nearly $90 billion of revenue in the US and $11.4 billion in Canada.

Recession Spurs US Store Brands

Nielsen analysis indicates the recession has ignited store brand activity during the last few years in the US. However, in Canada, national brands have met Canadians’ needs for value by driving more sales through feature pricing.

Store brand performance varies by department in both countries. In Canada,store brands outperform national brands only in produce and health and beauty. Meanwhile, in the U.S., Nielsen shows greater development in food and beverage categories and store brand share growth in all departments except dairy. While the vast majority of category sales in both Canada and the US are branded items, Nielsen predicts store brands likely will continue to grow in both countries during the long-term.

Sizable Percentages See Quality in Private Label

nielsen-private-label-quality-north-america-2010-mar-2011.JPGForty-two percent of Canadians and Americans said that private label brands were good alternatives to name brands, with slightly more Canadians (40%) than Americans (37%) indicating that the quality of private label brands was as good as name brands.

In addition, 34% of Canadians and 33% of Americans said private label brands are as good as name brands, while 36% of Americans and 34% of Canadians said some private label brands are of higher quality than name brands.

In terms of negative opinions about private label goods, Canadians are more likely than Americans to say private label brands are not suitable when quality matters (14% compared to 10%) and that private label brands have cheap-looking packaging (25% compared to 17%).

North American Perceptions of Private Label Beat Global Average

nielsen-private-label-perception-global-2010-mar-2011.JPGAccording to Nielsen’s survey, North American consumers are somewhat more likely than global consumers as a whole to rate private label goods as being high quality. More than one in three global online respondents (37%) perceives private label brands to be a good alternative to name brands. Twenty-nine percent think the quality of most private labels goods is as good as name brands and 35% believe that some private label products are of a higher quality than name brands.

In addition, global consumers are more likely than North American consumers to provide negative feedback on private label goods. Globally, 26% of consumers say private label products are not suitable when quality matters (more than 2.5 times the 10% rate of North American consumers) and 32% say private label brands have cheap-looking packaging (more than 1.5 times the 18% rate of North American consumers).

North Americans Most Likely to Continue Buying Private Label

North American consumers had a higher rate of saying they will continue to buy private label products after the recession ends (94%) than consumers in any other region, according to other survey findings. European consumers were the next-most likely (92%). The only region with a positive response rate to this question significantly different than the global average of 91% were those in Middle East/Africa/Pakistan (MEAP). Only 80% of MEAP consumers indicated they plan to continue buying more private label goods, fully 12% below the global average.

About the Data: Nielsen surveyed more than 27,000 respondents across 53 countries in 2010.


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