COVID-19 concerns and product shortages fueled store brand sales over national brand purchases during the first quarter of 2020.
Store brands posted double-digit sales increases across U.S. supermarkets, discounters and drug stores in the first three months of the year, according to new data provided to the Private Label Manufacturers Association (PLMA) by Nielsen.
A store brand, also known as private label, is a product manufactured specifically for a retailer. Store brand products are availability in a variety of food grocery categories, including fresh, frozen, refrigerated, canned and more. These products usually have the retailer’s name on the label.
Changing consumer loyalties
Plant closures due to COVID-19 impacted the meat supply chain, leading to product shortages on retail shelves and driving some consumers to new products or brands.
More than a third of Americans have purchased a new brand or product during COVID-19, according to research consultancy firm Magid. Nearly half indicated they planned to stay with the new brand or product after the global pandemic.
In Italy, national brands saw a 2.3% decrease in value share since the beginning of 2020, while store brands saw a 2.3% increase in value share.
"There's no doubt that shopper behavior was highly influenced by consumer fears. Nonetheless the statistics point to greater acceptance of retailer brands as the coronavirus crisis evolves,” PLMA President Brian Sharoff said in a statement.
Strong sales gains
Sales of private label products across all retail outlets went up $4.9 billion, an increase of nearly 15%, during the first quarter of 2020 compared to the year before. Unit volume increased by 13%, a gain of approximately 1.5 billion products sold. Store brand dollar and unit sales were about one-third higher than national brands.
The total dollar sales for the first quarter was $38.4 billion, resulting in 13.2 billion units sold.
The strongest sales gains for private brands were seen in mass merchandisers, club stores and dollar stores, such as Amazon, Target, Costco and Dollar General. Store brands increased 16.6% and unit sales gained 16.5% compared to the same quarter in 2019 in this category
View our continuing coverage of the coronavirus/COVID-19 pandemic.
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