SCHAUMBURG, Ill. — While private-label dollar growth historically has been driven by higher prices, unit sales are now growing as well, according to the Nielsen Co.
Store-brand volume grew 3% in food, drug and mass channels (excluding Wal-Mart) for the 28 weeks ending Sept. 6. This contrasts to prior performance in which dollar share grew, while unit sales remained flat.
“Last summer, private label started to take off,” Tom Pirovano, Nielsen's director of industry insights, said in a conference call hosted by Citi Investment Research.
The shift got Nielsen's attention because unit sales haven't grown as much recently, even in light of the economic downturn.
“It could have been because people find it difficult to make changes in their behavior, even if they know they should cut back,” he said.
But that mind-set may be changing due to continued food inflation, high gas prices and talk about a recession.
“It could be a sign that the economy has gotten bad enough that people are starting to shift more [to private label],” he said.
The unit sales growth comes at a time when private-label dollar sales grew $7.4 billion to $80.3 billion in food, drug and mass (including Wal-Mart) for the 52 weeks ending Aug. 9. For the same period, private-label dollar share was up 0.9 points to 16.2%. In supermarkets, private-label sales were $52 billion, a 9.9% increase from the same 52 weeks in 2007.