PLMA e-scanner June 4, 2022

Unprecedented forces impacted nearly every aspect of the grocery industry over the past two years. Product innovation and format development, online ordering and delivery options, and pricing strategies have all changed. While better days seem to lie ahead, major transformation and the evolution of all aspects of retailing will remain.

Presenters will include Jac Ross, the Vice President for Own Brands at Sprouts Supermarkets, who will discuss innovations in products and packaging; John Evans, Director of Private Brands, GM, HBC, and Non-Foods at Weis Markets, who will examine the role of the retailer in the private label industry; and Kelly McGolrick, Vice President of Private Label Sales Development for Lassonde Pappas & Company, who will address the role of the manufacturer.

Since the program’s inception in 2001, more than 2,000 men and women from all sectors of the industry have graduated. Classes are perfect for new hires, those who built their careers working for national brands, or any professional in the field who is looking to refresh their knowledge, broaden focus and sharpen the ability to think and interact strategically.

To register or receive more information about the program, visit PLMA.com or contact Julia Meehan at education@plma.com.

Store brand dollar sales grew by 9.5% in April compared to a year ago, double the national brand improvement of 4.6%. In March, sales grew 8.9% while national brand sales clocked in at 5%. On average, store brand dollar sales have averaged 9% growth in the past three months. 

In the first two months of 2022, February dollar sales were 6.8% and in January, private brand dollar sales growth 5%, and ahead of national brands at 6.5% and 4.6%, vs the same period in 2021.

Overall, dollar share in 2022 stands at 18.1%, an increase over the 17.7% in 2021 for store brands in all the major channels. Unit sales continue to decline, however. They have fallen an average of 2.4% so far in 2022 but at a slower pace than national brands which saw an average 3.7% unit sales drop this year.

For May, 13 of 17 departments showed store brand dollar growth, with only deli cheese, beauty, home care and tobacco showing declines. While liquor and floral showed the strongest dollar growth with 23.3% and 19.8%, respectively, and other categories were not far behind.

Beverages increased 19.4%, refrigerated products grew 14.9% general food came in at 9.5% and frozen showed a 7% increase.

The most recent statistics are available for members at plma.com through the IRI Unify section. Members can also find information on 317 categories and 967 subcategories, as well as statistics from 18 departments.

PLMA’s 2022 Private Label Report, which is available to all, highlights private brand sales statistics for 2021 and can be downloaded from plma.com under “About the Industry / Research, Reports and Publications.”

“While we’ve experienced high levels of inflation in our international markets over the years, U.S. inflation being this high and moving so quickly, both in food and general merchandise is unusual,” McMillon said. “We’ll control what we can control, reduce our inventory level, and keep prices as low as we can, especially on opening price point food items, while improving our profit performance.”

Still, while inflation may be posing challenges, McMillon explained Walmart is better positioned than smaller companies to keep prices low, appealing to low-income consumers.

“Not all of them can afford to absorb this — that’s where they need our help,” McMillon said, adding that the company is focusing on the essential categories where it can keep prices low for those who are struggling to purchase food.

Brett Biggs, Walmart’s Executive Vice President, and Chief Financial Officer, pointed out consumer concerns about high inflation are resulting in shoppers turning to store brands. “Consumers are feeling inflation pressures as evidenced by an increase in grocery private-label penetration,” said Biggs.

John Furner, chief executive of Walmart U.S., agreed, saying the move to private labels is happening in categories like “deli, lunch meat, bacon and dairy.”

“We need to do more to keep costs low, and where we see the switching from brands to private brands, we’ll continue to watch that for a group of customers,” Furner said on the investors call.

When it came to food and supply chain costs, Biggs added that Walmart plans to “partner with suppliers on the food and consumables side this spring to try and bring those costs down.”​

Despite its limited availability, Numerator found Shipt Everyday captured 10.1% of its subscribers’ share vs. 4.3% of their total shoppers’ share. Walmart+ captured the highest purchase frequency, buy rate, and share of wallet from subscribers, capturing 18.5% of its subscribers’ share vs. 14.6% of their total shoppers’ share.

But Amazon was found to have the highest loyalty. Seventy-eight percent of Prime members do not subscribe to any other membership program. That compares with the 28% who only subscribe to Target’s Shipt Everyday and the 24% who only use Walmart+. Nearly three in four Walmart+ subscribers (73%) also have Amazon Prime, while 53% of Target’s Shipt Everyday members also have Prime.

Four in five households that count themselves as retail subscribers are committed to just one program, while 13.8% subscribe to two programs; 3.7% subscribe to three; and 2.5% subscribe to four or more programs. According to Numerator, consumers who subscribed to more than one program were more likely to be Black or Hispanic/Latino, from larger households, value-driven and buy on impulse.

The company is planning to promote its private label products, including its H-E-B Organics and H-E-B Naturals lines, through the platform as an excellent source of better-for-you and nutritional foods.

“We believe that food plays an integral role in wellbeing, and as one of the largest sellers of food in the state of Texas, we’re committed to making it easy for Texans to live better and healthier,” H-E-B President Craig Boyan said in a statement announcing the venture.

Whether consumers are navigating the healthcare system due to a chronic disease diagnosis or simply trying to keep their family healthy, managing health and wellbeing have become increasingly complicated. H-E-B Wellness is seen as a “one-stop” destination for all healthcare needs. 

“Despite the growing focus on health today, consumers struggle to navigate their health journeys on their own. It can feel like a huge burden financially and emotionally. Everyone is seeking unbiased, reliable information and simple solutions to meet their unique health and wellness needs,” the company said in a statement.

This trend shows no signs of changing. Over the next 12 months, 46.9% said they plan to buy groceries online, a decrease from the 49.5% who planned to do so in the 2021 Coresight survey. This marks the second year in a row that customer expectations for the upcoming 12 months were below actual behavior in the past year.

However, Coresight noted there is some good news for e-commerce grocery sales. The report found the 54.3% of consumers who did buy groceries online in 2022 is 4.8 percentage points higher than the 49.5% of those surveyed in 2021 who said they expected to purchase groceries online over the coming year. The 2022 percentage of online grocery purchasers, too, remained above the percentages for 2020 (52%) and the pre-pandemic period in 2019 (36.8%).

The share of customers doing the bulk of their grocery shopping online has also grown nearly four percentage points. In 2022, 28.3% of those polled did most or almost all/all their grocery shop online. That compared with 24.7% in 2021 and 14% in 2020.

Among retailers, Amazon and Walmart were the most popular retailers with online grocery customers. The study found 51.6% and 50.5% of 2022 survey respondents, respectively, made a purchase with those operators in the past 12 months.

Rounding out the top 10 most-shopped online retailers were Target (25.5%), Sam’s Club (16.1%), Costco Wholesale (15.7%), The Kroger Co. (13.6%), Whole Foods Market (13.1%), Aldi (8.4%), Publix (7.1%) and Albertsons/Safeway (7%).

“Bob Iger is one of the most important and visionary business leaders of this generation,” said Gola in a statement. “He defined consumer engagement, product innovation and organizational excellence. I am so proud and excited that Bob is joining team blue. Gopuff is building a platform designed for the future of the consumer industry, and nobody understands consumers better than Bob Iger.” 

Iger was CEO of The Walt Disney Company from 2005 to 2020, and helped Disney become one of the world’s largest and most influential media and entertainment companies. 

“It’s been exciting to spend time with Gopuff leadership learning about the company, the founders and their aspirations,” said Iger. “I am excited to advise, mentor and support the executive team as they continue building a company uniquely designed for how consumers are changing and growing.”

Philadelphia-based Gopuff was founded in 2013 and has more than 600 locations in 1,200 cities globally.