Categories / Kitchen Products
Category Insights: General Merchandise - Household

Channel Growth Helping Private Label Expand In GM

Household goods showing strength from small segments to large ones.

June 4, 2013

From batteries to cleaning tools and soap dishes, private label household products continue to make inroads in the general merchandise sections of retailers

Eye on the National Brands

In batteries, Proctor & Gamble and Energizer Holdings control about 80 percent of sales. A major marketing campaign in 2012 from Duracell promoted a 10-year shelf-life guarantee for its batteries, a move Mintel expected would “make shelf life more top-of-mind among battery shoppers.” … In cleaning tools, Swiffer and Scotch-Brite innovations have changed the types of branded products being bought in the category. “When consumers do make tools/mops/brooms purchases, they are increasingly likely to buy products from Swiffer or its most direct competitors, an indication that consumers are continuing to move away from heavy-duty, top-to-bottom cleaning in favor of quicker ad hoc spot cleaning.” … In kitchen storage, brands are using innovations to create new products despite stagnant sales in the category. Mintel cited glass containers that can go from freezer or refrigerator to microwave or oven; plastic containers with closure mechanisms that form tight, leak-proof seals; lightweight freezer bags that keep individual portions separate; and modular food storage systems that offer greater space efficiency and flexibility in packing meals meant to be taken out of the home.

across the country.

And as private label share continues to grow in channels such as dollar stores and convenience stores, those unit sales and dollar sales continue to grow as well.

Take the cleaning tools category. In a Mintel Group Ltd. report titles “Household Cleaning Equipment – July 2012,” the report showed total category sales of $2.67 billion in 2012, with flat forecasts keeping sales expected at $2.62 billion by 2017.

According to data from IRI, private label dollar share reached 12.6 percent in the category in 2012, with sales of $245.4 million down about 7.2 percent from 2011. Private label unit share was 20.2 percent, with unit volume down about 5.3 percent from a year earlier.

But the increasing good reviews from shoppers with the products leaves private label able to potentially make further gains, Mintel said.

“Category shoppers give private label products more credit for effectiveness than actual market share would suggest,” the report said, “possibly representing an unexploited opportunity for retailers to promote their own brands in the cleaning aisle.”

Among the growth areas in the category are gloves, with sales up 10 percent from 2010 through 2012.

“Growth has come primarily from disposable gloves, increasingly popular for health and safety reasons in a variety of household uses,” the Mintel report said.

Kevin Kelly, the sales manager of the consumer products group for Therochem  Laboratories, said quality remained the growth driver for private label in the general merchandise category.

“Retailers are looking for better quality products that are closer to a national brand equivalent, which is why we are constantly aware of what products national brands are putting in the market,” Kelly said.

Among the largest household categories in private label is batteries.

The Mintel report “Household Batteries – August 2012” showed that private label controls most of the market that isn’t in the hands of Proctor & Gamble and Energizer. Private label share rose slightly in 2012 to 16.4 percent, the report said, and has stayed fairly constant since peaking at 16.7 percent in 2009.

IRI data showed that private label had a 12.8 percent share in the category, and in the alkaline batteries segment, sales grew 5.1 percent in 2012 from 2011. Private label unit share is 20.2 percent, with volume down just more than 1 percent from a year ago.

Perception can play a role for private label in the category, the Mintel report said.

“Only 11 percent (of consumers) agree that store brand batteries are just as effective as national brands, a finding that would seem to limit private label to the low-price alternative,” the report said, but followed with, “Similarly, only 10 percent agree strongly that one battery brand is about as good as another.”

With private label dollar share near 13 percent, that would seem to open the field to reach consumers who felt that battery brands were nearly as good as another, but did not feel strongly about it.

Kitchen storage is another area where private label continues to grow share.

The “Food Storage – January 2013” report shows that private label share has risen more than 5 percent since 2008 to 30 percent. That’s 10 percent more than Rank Group Ltd., the leading branded company in the category.

“In this difficult environment, store brands have made substantial market share gains in every segment of the category between 2007 and 2012,” the report said. “Shoppers report a variety of money-saving behaviors, from stocking up when there are special offers to purchasing store brands. Category purchasers with household incomes of less than $50,000 are more likely than more affluent purchasers to take steps to save money on food storage products, including buying store brands or purchasing the cheapest food storage products available.”

Food storage bags, storage containers, and aluminum foil account for nearly 93 percent of segment sales, the Mintel report said, and sales are expected to grow a little more than 1 percent annually to $4.75 billion in 2017.

IRI data shows that private label dollar share was 13.5 percent in 2012, with sales down about 1 percent from a year earlier. Unit share reached 17.7 percent, with unit volume rising about 5 percent.

Catching the eye of consumers has become increasingly important for private label products, as well as branded ones, in the household categories.

Tom Aries, president of Aries Manufacturing, said his company’s wireless device chargers – for electronics items such as iPods, MP3 players and smartphones – are selling particularly well now.

“The consumer likes colors and personalization for their mobile devices,” he said.

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General merchandise

Aries said that more knowledgeable consumers are helping drive sales in the category.

“There are more mobile devices than people in the United States, and that is a number retailers can’t ignore,” he said.

And as that explosion continues, keeping products on the shelves to meet demand is the priority.

“USB chargers for the home and car are selling briskly at the register and inline,” Aries said. “Overall the wireless accessory category is much easier to manage and obsolete inventory has almost disappeared.”

Other strong categories for private label in household general merchandise include light bulbs. In the $1.06 billion category, according to IRI data, private label share reached 9.6 percent as sales grew 11.9 percent in 2012. Unit share is 13.0 percent, with private label unit volume down 9 percent despite the sales growth.

In household plastics, private label dollar share of the $600.4 million category is 35.9 percent, and sales rose about 8 percent in 2012. Unit share is 32 percent, with private label unit volume down about 1 percent.

On the smaller side of dollar sales are toothbrush holders and soap dishes.

Toothbrush holders overall are a $44.4 million category, but private label controls 59.3 percent of the dollar share in the category, and 49.5 percent of the unit share.

 Similarly, soap dishes are a $20.7 million category, according to IRI, but private label has a 65.3 percent dollar share of the segment, with a 61.4 percent unit share.  

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