Private Label Retail Sales are Here to Stay

by Christine Hronec

The latest market share data shows that the popularity of private label continues to spread across Europe and United States. Retailer brands now account for at least 30% of all products sold in 15 countries, the greatest number ever, according to Nielsen data compiled for PLMA’s 2014 International Private Label Yearbook.

Private label continues to account for more than half of all products sold in European markets. The study shows that private label plays a fundamental role in the lives of shoppers where, one in four believe that they will buy a larger amount of store brands than currently. Even when the economy gets better, consumers say that they will stick with private label: eight in ten said that they would not stop purchasing store brands.

WHAT ARE PRIVATE LABEL PRODUCTS? Private label products encompass all merchandise sold under a retailer’s brand. That brand can be the retailer’s own name or a name created exclusively by that retailer. In some cases, a retailer may belong to a wholesale group that owns the brands that are available to only the members of the group.

WHAT PRODUCTS ARE SOLD AS PRIVATE LABEL? Major supermarkets, hypermarkets, drug stores and discounters today offer almost any product under the retailer’s brand. Private label cover full lines of fresh, canned, frozen, and dry foods; snacks, ethnic specialties, pet foods, health and beauty, over-the-counter drugs, cosmetics, household and laundry products, DIY, lawn and garden, paints, hardware and auto aftercare.

WHAT ARE THE ADVANTAGES OF PRIVATE LABEL? For the consumer, private label represents the choice and opportunity to regularly purchase quality food and non-food products at savings compared to manufacturer brands, without waiting for promotional pricing. Private label items consist of the same or better ingredients than the manufacturer brands, and because the retailer’s name or symbol is on the package, the consumer is assured that the product meets the retailer’s quality standards and specifications.

 Manufacturers of private label products fall into three general classifications:

  • Large manufacturers who produce both their own brands and private label products.
  • Small and medium size manufacturers that specialize in particular product lines and concentrate on producing private label almost exclusively.
  • Major retailers and wholesalers that operate their own manufacturing plants and provide private label products for their own stores.

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