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Turkey or Toast: How Private Label Fared for Thanksgiving

The PLBuyer Index is up, and the last period was one of the best of the year.

The PLBuyer Index for the 4 weeks ending December 1, 2013 hit 103.9, up from 102.2. Private label share of revenue was up slightly, to 17.4 percent. Revenue was up 1.8 percent for national brands, but was up 2.3 percent for private label.

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Overall, prices increased by 1.4 percent vs. the same period last year, but private label made up a greater share of the increase—private label prices increased by 1.7 percent vs. 1.3 percent for national brands. Private label prices were 18.6 percent lower than national brands. In 2012, private label prices were 18.9 percent lower than national brands during the same 52-week period. Private label units sold were up 0.6 percent vs. the same period last year, while national brand unit sales rose 0.5 percent.


Holiday Impact

While grocery retailing does not have quite the degree of seasonality of other verticals, the last two periods of the year are extremely important, as they contain Thanksgiving and Christmas, both strong grocery holidays.

In fact, the 4-week period ending at the beginning of December and the 4-week period ending at the end of December were the two most important periods for all of grocery in 2012, and for several departments within grocery, as well.

So far, the period ending December 1, 2013 is already the best of the year for several departments (and for Total Store); in 2012, the following period was even better.

However, total category success does not always mean private label success. In 2012, Bakery private label dominated during the period ending December 2, 2012, while overall the Bakery department peaked in the summer months. In Non-Edible, private label is coming into its own for November and December, but national brands follow a different pattern, peaking in sales in June.

So despite the fact that year-to-date, private label sales have reached heights unmatched for the rest of the year in four different categories (when looking at 4-week period numbers), only two departments, Edible and Dairy, show both Total Store results and private label results that promise to be consistent with last year.

 

Edible Strength

The Edible department, as IRI defines it, is the largest department that we track for the PLBuyer Index, consistently contributing around 40 percent of Total Store sales, and roughly 25 percent of all private label sales.

Private label Edible did very well this period, bringing in an Index value of 109.5 for the 4-week period, which in turn contributed to an upturn in the 52-week rolling data, bringing that Index value up to 98.1—the highest it has been since we began tracking the Index.

Year to date, private label has averaged 29.4 percent lower prices than national brands, which is slightly better than last year’s year-to-date price differential of 29.5 percent. In 2012, though, national brands discounted more heavily going into the 4-week period that contains Thanksgiving, with their average price dropping from $2.46 per unit sold in the period ending November 4, 2012 to $2.41 in the year-ago current period. In 2012, private label prices held firm: $1.78 in the November 2012 period, and $1.79 in the 2012 current period.

 In 2013, the story was not quite repeated. National brands discounted again—from $2.48 average price in the period ending November 3, 2013 to $2.41 in the period ending December 1, 2013. But private label was not able to maintain the prices they had last year, dropping from an average of $1.78 in the November period to $1.76 in the December period. The price differential in the December 2013 period was much greater than the one from 2012: 30.5 percent lower prices than national brands vs. 29.3 percent lower last year. However, the result was a larger share of units—16.3 percent in December 2013 vs. 15.9 percent in December 2012, and slightly higher share of revenue, at 11.9 percent (vs. 11.8 percent in 2012). The net result? A 109.5 Index for Edible.  


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(www.retailsystemsresearch.com) is the only research company run by retailers for the retail industry. Our philosophy is simple: your success in the market is our success.

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