Conference Coverage: As PL Sales Stall, Retailers Need to Step UP PL Efforts

September 27, 2011
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Private label benefitted greatly from the Great Recession, however since the end of 2008, PL share growth across the food, drug and mass retailer channels has been fairly flat because brands have stepped up their promotional and innovation efforts, said Todd Hale, senior vice president, consumer & shopper insights, with Nielsen, during FMI’s Private Brands Summit Tuesday in Chicago.
“While a number of retailers come to mind who have initiated significant rigor in how they manage their private label business, one could hypothesize that the stagnant share could also be a result of some retailers not using enough rigor in building or maintaining their private label offerings,” he said.
Nielsen has identified six private label shopper types after examining consumer private label attitudes and behaviors by income, generations and cultural background. They are:
• Downscale value committed: this includes 9 percent of U.S. households who shop downscale retailers; they are interested in low prices and are committed to private label (mainly value-tier) for good quality and value.
• Downscale value price committed: this includes 6 percent of U.S. households who also shop downscale retailers; low prices are important to them and they purchase private label because of low prices, but they have negative quality/value perceptions of private label
• Mainstream loyals: 20 percent of U.S. households loyal to private label; they are heavy private label buyers and have a positive view of them. They shop at mainstream retailers and mid-tier private label brands are most important to them.
• Upscale premium: 10 percent of U.S. households who spend a high percentage of their private label dollars on premium-tier private label and who shop upscale retailers.
• Low spend potential: 30 percent of U.S. households who have a positive perception of private label, but their private label spending is low.

• Low spend rejecters: 25 percent of U.S. households who have a negative perception of private label and their private label spending is low.

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