Private Label Household and Personal Care Sales Surge

Apr 30, 2002

Private-label sales surged up to 35 percent in categories such as diapers and batteries. They also showed strong double-digit growth across more than a dozen other household and personal care products for the 13 weeks ended March 24, as compared with the same period a year earlier, according to JP Morgan Securities and ACNielsen.

Private-label sales rose at least six percent to seven percent in 20 of 35 package-goods categories that the Banc of America Securities tracked. However, the rise didn’t extend to the food category, reports

Banc of America analyst William Steele attributes private-label gains to lack of genuine innovation by national brands. “The No. 1 mistake I’ve seen is that in order to make short-term [earnings numbers], publicly held companies have cut spending behind their brands-innovation, advertising and sales promotion.”

Moderator Comment: Why are American consumers seemingly
more willing to buy private label?

The improvement in private label is less about what the
national brands are not doing and more about what retailers are doing. The
emphasis that many retailers’ have placed on premium quality and efficacy of
ingredients has more consumers convinced that they are actually trading up (not
down) by going to store brand HBC and other non-food products. [George
Anderson – Moderator

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