STUDY: BIG BRAND SALES BOUNCED BACK IN '94

CHICAGO -- National brands bounced back in 1994, with dollar sales gains in supermarkets surpassing those of store brands for the year's last three quarters, according to new scan data analysis from Information Resources Inc. here.

growth vs. 2%; then shot upward with a 4.7% gain in the third quarter vs. private label's 2.9% increase. Finally, in the fourth quarter, branded dollar sales jumped 3.8% against private label's 2.8% gain.

The new IRI data for the full year was drawn from the firm's InfoScan Census, which now is using a greatly expanded data base of 16,000 grocery stores in 64 major markets, representing 80% of chain store groupings nationally, or 50% to 60% of total grocery store movements. Previously, InfoScan data was projected from a base of 2,700 supermarkets.

The data was presented for the first time by Mark Mallardi, IRI sales representative, who spoke at a conference about retail brands in Palm Springs, Calif., last month sponsored by the Institute for International Research, New York.

Mallardi said private label's percentage of total store unit sales has begun to wane. It had been averaging 19.4% in 1992, climbed to 19.7% in 1993, then fell back to 19.4% in 1994, representing "for the first time a decline on a unit basis. That bucks a three-year trend that had been established," he said.

Mallardi was not, however, sounding a death knell for private

label. He said this trend may be "a very short-term window" of six to nine months and "might be part of the cyclical nature of private label."

He noted that private-label growth has been "fairly significant since the first quarter of 1993, representing very solid continuous growth, quarter-to-quarter. The thing that stands out is manufacturers' brands reasserting themselves somewhat."

He attributed such a robust national-brand performance to a recovering U.S. economy. National-brand gains specifically have also been artificially driven in part by price increases, he said.

In terms of current dollars, retail grocery growth over the last two quarters of 1994 has been the strongest it's been for the past two years, he said. "However, when you look at constant dollars of 1987, you find grocery sales are more price-driven vs. actual new sales gains," he added.

The economy has perked up better than expected, where 1994 showed the strongest growth in the decade and the lowest inflation rate in 30 years. "On a national economic scale," Mallardi said, "the GDP had a 4.5% growth rate in the fourth quarter, and for the full year it was a 4% annual growth rate, which analysts expected to be more at a 3.5% rate. So the economy is still cooking through the fourth quarter.

"A lot of jobs have been created in the economy; there's been more of a sense of security and less job-loss volatility than there had been over the past couple of years. Inflation, too, has stayed down at a very low level."

Overall dollar sales for packaged goods in 1994's fourth quarter were up 6.2% vs. the comparable period in 1993, while unit sales edged up only 2%, indicating inflation-driven numbers. In a similar vein, food dollar sales were up 6.5% for the quarter, Mallardi noted, but unit growth was only 1.9%.

The "big, heavy-hitters or established staple categories" showed most of the growth in food stores, Mallardi said. He singled out 10 categories for absolute dollar growth in 1994's fourth quarter. Coffee led with a $394.5 million gain, due to price hikes, followed by carbonated beverages up $212.1 million, and candy/mints up $181.9 million.

The 15 largest private-label growth categories in food stores represented 82% of the private-label gain for the fourth quar-

ter. Coffee was at the top, up by $38.3 million, taking a 7.9% share of its category sales; fresh bread and rolls up by $20.3 million, taking a 28.2% share, and milk up by $19 million, with a 65.1% share.

In the largest declining private-label categories for that quarter, frozen juices dropped by $13 million, still holding on to a 31% category share of sales, followed by cigarettes, off $11.9 million, with a 4.3% category share; and refrigerated juices down $6.1 million, with its 17% category share.