Nielsen: Canadian Private Label Customers are Extremely Valuable

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October 26, 2010

While private label products can be found in the pantry of every Canadian home, the profile of the heaviest private label shoppers reveals they are very valuable customers across all categories, according to data form The Nielsen co.

Canada’s heaviest private label buyers are typically under 45 years of age, live in larger households (three or more) with children under the age of 18 and typically make $70,000 plus in annual income. Furthermore, super heavy and heavy private label buyers in Canada account for nearly 60 percent of total private label dollar sales, according to Nielsen.

“Top private label buyers spend more than the average shopper across all product categories and spend more per shopping trip, with private label products accounting for more than one-third of their total shopping trip bill,” Nielsen wrote in its report, noting that the private label buyer in Canada is “evolving to one person households, age 55-64 years, no kids, with incomes of $100K plus.”

The intent of the Nielsen report is to get a better handle on the future buyers of private label in Canada, not just who is buying private label today.

“As the face of the private label consumer evolves along with general demographic trends to smaller, older, higher income households, retailers need to make sure they are planning for the future by innovating to meet the needs of tomorrow’s private label consumer,” said Carman Allison, director of industry insights, Nielsen. “This could mean an increased focus on smaller sizes or portion-controlled products, health and wellness offerings such as low fat or low sodium, and premium offerings to attract higher income consumers.”

Fast-moving consumer goods (FMCG) private label sales in Canada remain flat at $11.4 billion, and unit sales are down 1 percent, while national brand dollar sales are up 3 percent to $50.9 billion and unit sales are up 2 percent, according to Nielsen. On average, Canadians spend $844 on private label products annually, up 2 percent from last year.

“The battle of the brands continues,” said Allison. “Despite the economic downturn, Canadians did not switch from national brands to private label products. National brands are meeting consumers’ needs for value by driving more sales through feature pricing while private label increased prices at a higher rate, narrowing the shelf price advantage. That said, Canadian retailer concentration is increasing, with the top five retailers representing the majority of the grocery trade. This translates to increased private label development.”

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