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Tax Increase Could Boost Private Label Sales In 2013

February 11, 2013
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New research from Symphony Consulting, a business unit of Chicago-based SymphonyIRI Group, shows that private label sales gained in the first four weeks of 2013 from the last four weeks of 2012 after the increased payroll tax kicked in Jan. 1.

“To date, shifts in shopper behavior are subtle, but patterns are emerging that deserve close and ongoing scrutiny,” said Dr. Krishnakumar S. Davey, managing director of Symphony Consulting, in a news release. “Our initial analysis offers highly current data on shopper behavior that will form the basis for ongoing research into the impact of the payroll tax increase.”

Sales growth in the first four weeks of 2013 was 2.1 percent, the same as it was in the final four weeks of 2012, as inflation fell from 1.4 percent growth to 1 percent.

However, the last week of the 2013 period showed softness in purchases, Symphony Consulting reported. Private label sales rose from 1 percent in the last four weeks of 2012 to 2 percent in the first four weeks of 2013, and dollar stores picked up share growth from mass merchandisers and club stores.

 “We expect payroll tax increases will impact non-CPG spending potentially more than CPG spending,” Davey said in the release. “However, out-of-home consumption will likely drop, and specifically out-of-home breakfast categories will be negatively impacted. Consumers usually eliminate the out-of-home breakfast meal first when they cut spending.”

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