IRI Data: Store Brands Innovation Pays Off

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March 2, 2010

Store brands now represents just under 18 percent of consumer packaged goods dollar sales and 23 percent of total units at all retail outlets, up nearly a full share point versus a year ago, according to Information Resources Inc’s February Times & Trends report titled “2009 CPG Year in Review.”

Although dollar share was negatively impacted by deflationary unit share growth is “evidence of consumers’ perception of store brands as a viable alternative to nationally branded CPG solutions.”

Although gains cut across all retail channels, convenience stores enjoyed the largest share bump, which IRI attributes to increased availability of store brand options to the channel and 7-Eleven’s focus on its 7-Select brand, which now has more than 200 SKUs.

Drug retailers also gained store brand ground, due primarily to innovation, according to the report, which cited Duane Reade’s D’Lish line.

In terms of category growth, the biggest gainers were healthcare and fresh/perishable products, “evidence of a recession-driven consumer mindset and associated ritual changes,” the report said. “Private label gained 1.4 share points in the healthcare department in 2009, driven, in part, by high levels of innovation and consumers’ increased reliance on self-care. The quest for savings is also quite clear. On average, private label healthcare options provide consumers savings of 46 percent over national brands. In tight economic times, these savings are substantial.”

In key categories such as personal care thermometers and anti-smoking products, store brands posted near-double-digit share gains, according to IRI data.

Another growing category is fresh/perishable as consumers continue to eat at home more often and make from-scratch meals. “Substantial gains were posted across key meal ingredient and meal component categories, including refrigerated entrees, fresh eggs, and refrigerated meat and poultry.

In IRI’s December 2009 Economic Survey, 54 percent of consumers indicate they are purchasing store brand products more often to save money; in 2010, 82 percent of these consumers said they will continue to do so, according to the report.

Meanwhile, store brand growth in categories with particularly high price increases over the past year was mixed. In 2009, private label posted small to moderate share gains in six of the ten highest-price-increase categories such as dish detergent and dog food.

“The driver is likely one of simple availability … Additionally, retailers have become a bit more aggressive in limiting national brand assortment in attempt to drive margins and lower prices.”

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