Is Private Label Growth here to stay?

AC Neilsen* (hat tip to George Ward @ShopMktgGeorge ) released new figures last week showing the growth of Private Label purchases around the world.


Consumers claim that they will continue to purchase private label even when their economy turns up again and national comparison figures show Switzerland leading the pack at 46% of all sales closely followed by my old home country the UK on 43%, with even the US now up to 17%.

Whilst its commonly thought that price is the only driver of Private Label my belief is that innovation is at least as important. Its only when store brands behave like manufacturer brands that they are seen as at least equal in consumer’s eyes.


In the UK food market the rapid growth of the chill fresh ready to cook and ready meals markets has been entirely private label and the successful launch of premium positioned foods by retailers like Tesco with their “Finest” range, or J Sainsbury with “Taste the Difference” has shown many a branded manufacturer the real power of Good, Better, Best.


Is there a natural limit to private label’s share? Looking again at the UK Sainsbury had to rapidly roll back on own label when they hit around 60% of all sales - shoppers deserted them – but that was a full store average, my guess is that some markets can go to 100% but that others have sufficiently entrenched brands to keep own label almost fully at bay.


*http://blog.nielsen.com/nielsenwire/consumer/global-private-label-report-the-rise-of-the-value-conscious-shopper/