IRI Reports Cite Strength of Store Brands

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July 27, 2010

Store brands are fast becoming household names highly trusted by consumers, with retailers using sophisticated strategies to grow store brand dollar and unit share. Meanwhile, national brand manufacturers are responding to lost share with aggressive new marketing strategies of their own.

Two reports released by SymphonyIRI Group Inc. analyze the retailer and national brand manufacturer trends at work in the store brands market.

“Understanding and Mitigating the Private Label Threat,” a 146-page report published annually, provides is tailored for national brand manufacturers. The current 23-page issue of IRI’s monthly Times & Trends titled “Store Brands: More Than Just a Safe Harbor in Turbulent Times,” provides manufacturers and retailers insight into current and emerging store brand trends as well as factors influencing the future of the CPG industry.

“Store brands growth galloped during the recession as shoppers revised their definition of value to be much more focused on price,” said Sean Seitzinger, senior vice president, consulting and innovation for IRI. “Today, growth continues at albeit a slower pace as the economy recovers, but store brands are here to stay and are gaining in importance. As retailers accelerate investment in aggressive assortment, product and promotion strategies, we expect store brands to play a critical role in offering value and differentiation.”

Among the principal findings of these reports:

• Store brand sales tend to be more concentrated versus the CPG industry as a whole. One-third of shoppers account for 62 percent of store brand sales, and the top 50 categories of store brand products account for more than two-thirds of store brand sales, versus 59 percent for the CPG industry as a whole.
• The healthcare department witnessed the most significant store brand growth in both dollar and unit share of 2.6 points and 1.7 points, respectively.
•  Dollar and unit share each grew 0.2 share points, to 18.3 percent and 23.1 percent, respectively, in 2010 over 2009; contrasting with growth of 1 point and 1.3 points in 2009 over 2008.
• Dollar and convenience stores enjoyed the most rapid unit share growth of 1.1 points and 0.9 points, respectively.
• On average, store brands offer a savings of 30.5 percent compared to national brands, but average price gaps varies widely across departments. These savings range from as low as 7 percent in fresh/perishable products to nearly 61 percent in beauty and personal care products.

“Store brand success moving forward hinges on real marketing prowess,” said Susan Viamari, editor of Times & Trends for IRI. “The need to understand and deliver against the most pressing needs of consumers is high. Those who do so effectively will be rewarded with share of wallet and, perhaps, true shopper loyalty.”

Read These Related Articles:

• IRI Data: Store Brands Innovation Pays Off
• IRI: Private Label All-Retail Unit Share Grows to 22.8 Percent
• IRI: Private Label's Strongest Growth is in Commodity Categories With Low Competition and Innovation
• Retailers: Focus on Packaging and In-Store Marketing to Drive Shopper Growth
• Store Brands Buying Decisions Made at the Shelf, Not in the Home

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