Traditional retailers have leveraged private label to attract value-conscious consumers amid strong competition from value channels. In fact, the grocery channel has secured above-average share of heavy private label shoppers’ total CPG spending. Yet competition for private label shopper spending is now heating up.
As value channel growth begins to plateau, supercenters, mass merchandisers and club stores are increasingly staking a claim on private label shoppers. While grocery channel private label share is essentially flat, share across value channels is growing. As detailed throughout this report, private label development, performance and potential vary dramatically by category. And, beyond food and beverage staples such as eggs and milk, the propensity to purchase private label varies substantially across consumer segments.
Both brand manufacturers and retailers will need to reevaluate their strategies vis-à-vis private label within this environment. The “right” assortment and competitive tactics for both manufacturers and retailers will depend upon the mix of heavy versus light private label shoppers within a store and within their category/brand consumer base. Effective marketing plans will be category and store-specific.