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Growth and Success
Store brands now account for nearly one of every four items sold in U.S. supermarkets, drug chains and mass merchandisers. For American consumers, store brands are brands like any other brands. In a nationwide study by Ipsos-MORI, seven out of ten shoppers believe that the private label products they buy are as good, if not better, than their national brand counterparts. Four in ten now identify themselves as “frequent” store brand shoppers and nearly half of all consumers say that their typical market basket contains 25% or more of store brand products. It's no surprise that store brands are held in such high esteem. They are a boon to consumers' pocketbooks. Shoppers who reached for the store brand of their favorite grocery products rather than the national brand, enjoyed an estimated $21 billion in annual savings, based on industry sales data. The difference is the so-called "marketing tax," which consists of advertising and promotional costs incurred by national brand makers that are passed on to consumers in the form of higher prices at the shelf. Store brands are important to retailers, too. Throughout the U.S., retailers use store brands to increase business as well as to win the loyalty of their customers. Whether a store brand carries the retailer’s own name or is part of a wholesaler's private label program, store brands give retailers a way to differentiate themselves from the competition. Store brands enhance the retailer's image and strengthen its relationship with consumers. Retailers know that consumers can buy a national brand anywhere, but they can only buy their store brand at their stores. What are store brand products? What products are sold as store brands? Major supermarkets, drug chains and mass merchandisers today offer consumers as store brands almost any product that is manufactured and distributed. These include full lines of fresh, frozen and refrigerated food, canned and dry foods, snacks, ethnic specialties, pet foods, health and beauty care, over-the-counter drugs, cosmetics, household and laundry products, lawn and garden chemicals, paints, hardware, auto aftercare, stationery, and housewares. What are the advantages of store brands? For the consumer, store brands represent choice and the opportunity to regularly purchase quality food and non-food products at considerable savings compared to buying national brands, without relying on coupons or promotional pricing. Moreover, store brands are made of the same or comparable ingredients as the national brands and because the store's name or symbol is on the package, the consumer is assured that the product is manufactured to the store's quality standards and specifications. Who makes store brands? Manufacturers of store brand products fall into four main classifications: to supply store brands on producing store brands almost exclusively. Often these companies are owned by corporations that also produce national brands
store brand products for themselves
A unique organization for unique industry The store brand business is unique. It has its own needs and objectives. That's why there is a trade association that serves this industry exclusively. The Private Label Manufacturers Association founded in 1979, represents more than 3,000 companies around the world and offers trade shows, programs, publications and a range of marketing-oriented services that are specifically designed for the store brand industry. For more information regarding the association, please contact PLMA at (212) 972-3131.
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The products represent more than $88 billion of current business at retail and are achieving new levels of growth every year. Indeed, the most accurate figure for all store brand grocery sales is actually well north of that Nielsen figure. There is an estimated $15 billion in sales in channels that are not traditionally counted, such as warehouse clubs, limited assortment/box stores, convenience stores and dollar stores, producing a grand total that almost certainly exceeds $100 billion.
Store brand products encompass all merchandise sold under a retail store's private label. That label can be the store's own name or a brand name created exclusively by the retailer for that store. In some cases, a store may belong to a wholesale buying group that owns labels which are available to the members of the group. These wholesaler-owned labels are referred to as controlled labels.