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Uncovering Private Label Consumer Trends
The emergence of private label/store brands was already affecting many categories prior to the economic downturn, and it appears that as the U.S. recession ebbs on, consumers continue to turn to private label brands as one way to tighten their belts. NPD's monthly The Economy Tracker shows almost two-thirds of U.S. consumers saying they will be more likely to purchase store brands/private label merchandise as the weakened economy continues its attempt to rebound, compared to about four in 10 who indicate they will buy national brands.
Nearly Every U.S. Household Consumes Private Label and Store Brand Foods
The NPD report Private Label Perceptions, Usage Patterns, & Intentions, shows 24 percent of all food and beverages served in American homes were store brands in 2008, up from 18 percent in 1999. Today, 97 percent of all households consume private label foods on a regular basis.
"There is no question that private label foods have become an integral part of American life," said Harry Balzer, chief industry analyst, NPD vice president, and author of NPD’s Report on Eating Patterns in America. "Furthermore, we do not hide private label foods as an ingredient or as an additive to another dish. Today over half of all store brand food eatings are the end dish."
Price and value are the chief reasons consumers purchase private label or store brands, shown by an NPD survey of grocery shoppers. Additionally, the survey illustrates most respondents also believe the quality of store brands is often equal to, or in some cases better than, name brands. Users of private label foods and beverages span all income levels and demographic profiles.
| Usage of Private Label Food by Household Income % of household private label servings | |||
| Household income | % of sample households | Private label food household servings | |
Less than $30K |
31% | 30% | |
$30K-$69K |
36% | 37% | |
$70K and more |
34% | 33% | |
Source: The NPD Group/National Eating Trends (August 2008)
Private Label Prevails in Other Industries
Dollar sales of private label brands at office super stores are on the rise, as well. Meanwhile, smaller brands have lost share at these retailers.
Private label brands are growing in importance in the automotive aftermarket, too. Recent economic trends have clearly focused consumers on value, and the low price point often associated with private labels is a compelling offer for consumers looking for ways to cut back.
Apparel: Setting Its Own Trend
Despite consumers’ focus on value and price during challenging economic times, not all industries are seeing private label growth. One example is the apparel industry, which has been hit hard by the U.S. economic downturn as consumers cut back on non-essential purchases. As consumers tighten their belts, it’s possible they are turning to familiar favorites for apparel purchases instead of trying store brands as they have in the past, thereby shifting share to the national brands.
Though not growing in share as seen in some other industries, private label is very important to the apparel market – still accounting for the largest percentage of dollar sales.
To learn more about NPD’s information and insight on private label brands and other marketplace trends, contact Charles Camaroto at 866-444-1411 contactnpd@npd.com.