Newly released consumer research by Food Marketing Institute (FMI), Arlington, Va., and IRI, Chicago, reveals that food retail private brands have greater influence on where grocery customers shop. Today, 46% of consumers say store brands influence their store choice vs. just 35% three years ago, and private brands are gaining fans across a wider range of demographics and generations, as retailers demonstrate innovation and value.
“The solid growth of private brands reflects the success of retailers treating private brands as brands, rather than just following the lead of national and legacy brands,” says Doug Baker, vice president, industry relations, FMI. “The proof is in consumer satisfaction; shoppers surveyed shared most that they trust the quality of private brands and believe they get a good value. Still, our research indicates that challenges remain for private brands’ image, such as its packaging.”
Grocery retail growth with their private brands has not been keeping pace with other retail channels, however private brands led manufacturer brands in dollar sales growth across multiple retail outlets for the second consecutive year, up 5.4%. The positive momentum is reflected across many private brand categories, geographic regions, consumer generations and income levels. The catalysts are a range of factors, including increased shopper trips, higher dollars per trip, increased velocity, shoppers adding more items to carts and expanded distribution.
Private brands posted U.S. sales of $153 billion in calendar year 2018 across multiple retail outlets and convenience, according to IRI.
“Consumers have shown they are willing to embrace new directions in their private brand strategies, which suggests myriad possibilities for retailers as they explore shopper preferences revealed in our research,” says Mark McKeown, client insights principal, IRI.