Store Brands: More Than Just a Safe Harbor in Turbulent Times

JUNE 2010
EXECUTIVE OVERVIEW

SymphonyIRI's Times & Trends highlights new developments and critical events across all major CPG categories and channels, providing powerful benchmarking data to help guide your strategic decisions. This issue explores current and emerging store brand trends as well as influencing factors that are helping to define the CPG industry of tomorrow. Retailers and manufacturers with a clear understanding of these trends will forge relationships with consumers that will transcend the economic downturn and fortify their position in the CPG world of tomorrow.

Introduction

In years gone by, store brands were known as “generic products.” With black and white labels and basic ingredients, these products were anything but fancy. They were available across a limited number of “commodity” CPG categories, and they available in a very limited assortment. But, they did meet consumers’ need for low-cost alternatives to brand name CPG products.

How times have changed. Today, retailers rely on store brands for their margin, to bring differentiation for consumers, and for the simple fact that they can control these products much more easily versus national brands. Consumers still rely on store brands for savings, and store brands are looked upon by many as offering equal, or even superior, quality versus name brand CPG products.

As has been the case in past recessionary periods, the country’s latest economic downturn served to reinforce store brands’ position within the CPG industry. But, the recession has prompted change across national brand manufacturers as well. These CPG players have upped their marketing game.

Select Findings

In contrast to strong share gains posted in 2009, store brand share performance has been relatively flat over the past year. Name-brand CPG manufacturers have turned up the heat on private brands. Tactics vary, but the goal is the same: to protect and build share. Nonetheless, retailers have been, and will continue to be, heavily focused on growing the depth and breadth of their store brand offerings, and the promotional support behind those offerings. Today, store brands account for 18.3% of CPG dollar sales and 23.1% of unit sales.

Store brands share gains cut across a majority of departments. But, store brand share performance does vary across, and even within, CPG departments. Share growth has moderated, even turned negative, across some key CPG categories over the past several months.

See the complete report in the "Store Brands: More Than Just a Safe Harbor in Turbulent Times" pdf.