The Private Label Challenge - The Glass Ceiling

When it comes to private label developments in the U.S., there have been numerous success stories in recent times. Operators like Trader Joe's have built a virtual cult following based on their unique store brands, while other traditional grocers, such as Kroger, have used store brands to buttress shopper loyalty. With many innovative and retail brand-enhancing programs out there, it's easy to assume the growth rates we saw in the middle of the last decade continue. But according to SymphonyIRI Group, private label in the last few years has generally "hit a proverbial glass ceiling."

Of course there are many perspectives to the story, with national brands regaining ground in some categories and private label pushing forward in others. "Private label has entered a phase of pockets of growth among categories and retailers, rather than a general expansion," writes Daniel Grubbs, principal, Symphony Consulting in SymphonyIRI Group's latest Times & Trends Report.

Here are some highlights from the report:

The Ground War: Private label unit share of consumer packaged goods (CPG) slipped to 17.1 percent during the past year, though dollars continued to inch forward. National brands are gaining volume share in 40 of the 100 largest CPG categories.

Post-Recession Affinity: Shopper acceptance of store brands continues during the economic recovery as households find they can stretch their dollars without giving up other product benefits.

Channel Differences: The grocery channel boasts above-average and growing share of private label sales. Meanwhile, private label share within drug and c-stores slid during the past year.

Top Private Label Buyers: Private label sales remain quite concentrated. At present, the top one-third of private label buyers account for nearly two-thirds of all private label sales. But even the heaviest buyers of private label dedicate only one out of every four CPG dollars to private label solutions.

Lack of Support: A majority of private label categories receive below-average levels of merchandising support, and support has been declining more quickly versus industry average during the past several years.

There are many more insights on Private Label/National Brand trends in the latest SymphonyIRI Times & Trends Report...

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