PRIVATE LABEL
Growth Spurt As inflation cools, innovation is as important as value for driving sales of private label products By Nora Caley
Private label continues to grow in share and sales, and its popularity is due to more than just low prices. While store brands have long appealed to budget-minded shoppers, the recent dip in inflation makes value a slightly less urgent need. Retailers must offer more than a low-priced alternative to national brands. Consumers want new products that solve their problems and are easy to find in-store. That’s according to several reports that indicate shoppers are responding favorably to store brands and will likely continue to buy them. According to the 2024 Private Brand Intelligence Report from Daymon, private brands have gained market share on national brands for the past three years. The report, citing NielsenIQ multichannel numbers, indicated that in the 52 weeks ending August 10, 2024, private brand unit share increased 1.5%, and dollar share increased 2.7%. National brand unit share decreased 1.2% and dollar share increased 1.1%. Also according to the Daymon report, 87% of shoppers say they purchase private brands every typical grocery trip, and 77% view private brands favorably when they launch LTOs and new flavors. “A lot of times consumers try private brands because of price,” said Dianne Galang, vice president of Daymon. “What we are
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finding over time is they don’t leave it because they see the value.” The value, Galang said, is not just price but quality, innovation and differentiation, especially in health and wellness products. Drugstores are well suited to respond to consumer trends, such as the demand for products related to proactive health, and holistic, whole body and mental health items.
Growth categories Drugstores can benefit from another trend: increased interest in beauty. A report from the Private Label Manufacturers Association noted that store brands reached all-time highs in unit share and dollar share in the first six months of 2024. Unit market share was 22.9% and dollar market share was 20.4% for the 52 weeks ending June 16. PLMA, citing Circana data, reported that several categories posted very strong dollar sales gains, including beauty, with a 10% gain. “Powered by innovative and unique products and even whole lines, beauty and personal care are enjoying an unprecedented surge of interest,” said PLMA president Peggy Davies.