Nielsen: Look to Europe for the Future of U.S. Store Brands

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March 30, 2010

Lisa Rider

To understand the future potential of U.S. store brands, retailers and suppliers should “look no further than Europe,” according to an article written by Lisa Rider, vice president, product leadership for Nielsen.

In Europe, store brands enjoy a 40 percent share of the market due to massive retail consolidation and early store brand investment.

“Consolidation has enabled companies to invest in product innovation, consumer research, and marketing, all of which has contributed to strong store brand growth,” Rider wrote. “In comparison, the retail universe in the U.S. is much more fragmented, and the most successful retailers tend to have 20 to 30 percent of sales coming from store brands, highlighting a significant opportunity for growth. Examining what European retailers have done and are doing to drive growth can provide clues to what could be in store for the American market.”

In 2009, U.S. store brands represented 21.8 percent of unit volume while only comprising 10 percent of store, according to Nielsen data. Meanwhile, economy national brands made up 21.3 percent of sales, while taking up 29.7 percent of items in stores.

“Consumers, who might have thought twice about including store brands on their shopping list years ago, now regularly purchase store brands, seeing them as a good value for certain grocery and household goods,” Rider wrote. “The recent surge in store brand sales has a number of retailers wondering what’s next. What will the future hold for store brands in the U.S.?”

In Rider’s estimation, retailers would do well to study the European market and apply key learnings in the U.S. market.

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