Private Label Buyer

FMI Research: Private Label 'Integral Part' Of Market Basket

October 24, 2012

New research presented this week by the Food Marketing Institute concludes that private label products have become an integral part of the American market basket, and that in many categories, they have become the first choice in pantries and medicine and beauty cabinets.

The information was presented Tuesday in a webinar, “The U.S. Grocery Shopper 2012 Trends: Private Brands,” by Thom Blischok, chief retail strategist and senior executive advisor of Booz and Company, and Douglas Baker, vice president of retail sales for Federated Group Inc.

The presentation showed that private label baskets continue to provide an average of a 30 percent discount to national brand products, while shoppers say they trust private label products at an increasing rate.

One potential warning sign has come in the past year. As private label’s share of sales rose to new heights since the Great Recession began in 2008, its share took a dip of nearly a full percent from 2011-2012, corresponding to a sharp rise in consumer confidence. Previously, low consumer confidence had correlated to higher private label shares.

The research shows that more than three-quarters of grocery shoppers buy as many as 70 private label categories on a regular basis, across all economic ranges. The highest range of 40-50 categories bought regularly is the same for those households totaling less than $25,000 annually as well as those making more than $70,000 annually.

In part, Blishock and Baker said, that is because shoppers adopted new “value seeking” habits during the recession, many of which they say they plan to keep after the recession ends.