While blue-collar and large families have traditionally been some of the biggest stalwarts of private-label products, a new report from Nielsen shows some surprising new fans: Younger women, and families earning $100,000 a year or more.
"It wasn't until fourth-quarter 2008 that we started to see these big shifts, driven largely by affluent households," Todd Hale, SVP/ Consumer & Shopper Insights, tells Marketing Daily. "These are now among the fastest users." By March 2010, Nielsen reports, store brands had a 17.3% share of dollar sales in the U.S. and a 21.9% share of units -- up 2.1 and 1.9 points, respectively, from 2007.
Also telling, he says, is the continued enthusiasm among younger shoppers, including Gen Y and Gen X. "It's the younger ones turning to store brands much more than older people." He says about half of both Millenials and Gen X shoppers say they are likely to turn to private labels, versus 41% of Baby Boomers and 35% of the Greatest Generation.
Both trends, he says, speak to the major inroads that private labels are continuing to make against national brands. Fueling that growth, he says, is the continued innovation from relatively upscale retailers, such as Costco and Target, at expanding store lines. "Those brands are clearly aimed at more affluent shoppers," he says.
Middle-income families (those earning between $30,000 and $70,000) continue to be the primary store-brand shoppers, while two-person households are also big users.
Overall, heavy users of store brands comprise just 20% of households, but they purchase 46% of store brand products, accounting for 34% of total store purchases.
Branded products, however, still drive the vast majority of dollar (82.7%) and of unit (78.1%) sales. Nielsen reports that store brand average period unit sales grew by 2.5% during that period, while national brands -- thanks to beefed-up promotional spending -- were able to stabilize declines and manage a growth of 0.4%.
Store brands tend to be weakest in categories with the strongest brand marketing support, like beer and candy, or those with the biggest innovations, including deodorants and detergents.