Nielsen: Store Brands Experience Growth During COVID-19

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Nielsen: Store Brands Experience Growth During COVID-19

By Dan Ochwat and Seth Mendelson - 04/28/2020

From Store Brands, April 27:

First quarter dollar sales for store brands across all retail outlets rose nearly 15%, knocking on the door of $5 billion, year over year, per Nielsen and the Private Label Manufacturers Association (PLMA).

As shoppers stacked their pantries with essential items during the coronavirus pandemic, private brand products were a beneficiary. The PLMA acquired data from Nielsen on how store brands fared in Q1 against national brands and learned that the private label category rose about a third more in both dollar and unit sales compared to national brands.

In all U.S. retail outlets, private brands increased 14.6% in dollar volume and 12.8% in unit volume, just ahead of national brands that saw an increase of 11.5% in dollars and 9.2% in unit volume. Both, private and national brands though, saw big first quarters.

Total dollar sales of store brands in Q1 reached $38.4 billion and units reached 13.2 billion.

“There’s no doubt that shopper behavior was highly influenced by consumer fears,” said Brian Sharoff, president of the PLMA. “Nonetheless, the statistics point to greater acceptance of retailer brands as the coronavirus crisis evolves.”

Private label manufacturers, meanwhile, are making some significant operational changes to cope with the rising demand. In certain categories, such as paper goods, over-the counter medicines, and hand sanitizers, factories are operating 24-hours a day, seven days a week. 

One east coast retailer noted that private label manufacturers have been "a bit faster" to fill the supply chain than some national brands. He added that he felt a "desire to get products to stores" played a big role in that. 

Some companies are creating fair share allocations for high-demand products, while many are simplifying SKU offerings, extending lead times to build inventories, and retooling to be more efficient for growing e-commerce business

For a closer look at specific retail channels, the Nielsen numbers showed:

  • In mass retail (mass merchants, club and dollar stores) gains were the highest, up 16.6% in dollar sales and 16.5% in unit sales, compared to Q1, 2019. National brands were up over 10% and 7%, respectively.
  • In supermarkets, store brand dollar sales jumped up by 12.7% and 9.7% in unit volume. National brands increased by 15% and 11.4%, respectively.
  • In drug stores, store brand dollar sales improved by 13%, year over year, and over 12% in unit sales; national brands increased by 7% in sales and one percent in units.

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