Many market researchers have questioned whether private label – or store brand – products would hold onto the gains they have made in market share during the recession. During previous recessions, store brands lost much of the progress they made as the economy recovered. However, new research from Symphony IRI Market Insight shows that store brands have not lost the gains they made last year. In fact, the organization suggests that store brands have grown both in terms of dollar and market share in 2010 – although at a much slower rate than during 2009.
IRI figures show private label in terms of unit sales grew from 21.6 percent of the market in 2008, to 22.9 percent in 2009, to 23.1 percent in 2010. For dollar share, the growth was from 17.1 percent in 2008, to 18.1 percent in 2009, to 18.3 percent in 2010.
“What is certain is that both retailers and national brand manufacturers must leverage shopper-centric approach to marketing in order to bring to market compelling products which are founded on sound consumer understanding, and then support those products with targeted, integrated and relevant promotional campaigns,” IRI said.
It has previously been seen that private label foods sell well during times of recession, with unit market share climbing from 20 percent to 21.8 percent in the 2001-2003 recession, according to the PLMA. And in the 1990-1991 recession, unit share for store brands moved up from 17.6 percent to 20 percent.
But increased innovation during the latest economic downturn worked to boost sales of private label products – and convinced some consumers to switch permanently from their old favorites.
“In a break from days gone by, when manufacturers were “innovating up” in attempt to drive larger margins and higher price tags, today’s manufacturers are innovating at both ends of the spectrum in attempt to regain traction with heavily value-focused shoppers while still serving higher-end consumers,” the report said.
The full report is available online here.