4 Private Label
Tracking top-line trends in store brands
Private label is not a thing
that you can describe [as]
‘It’s always this, it’s always
that.’ It’s the retailer’s
perception of themselves.”
—Brian Sharoff, PLMA
parallel-brand universe, where the simulation of very
successful name-brand products borders on the legally
indefensible,” the Hartman report says.
Creepy or not, enough shoppers find it appealing that
Aldi is undergoing explosive growth: It plans to expand
from 1,600 to 2,500 stores by the end of 2022. Lidl, its
fellow German discounter, is in the process of invading
America with much the same strategy.
Aldi and Lidl are almost the inverse of conventional
grocers like Kroger, with their offerings of both national
brands and several lines of private brands. “One view is
the house of brands, and the other is the branded house,”
says Jim Holbrook, CEO of Daymon Worldwide.
More shakeups are on the way. Amazon—which rolled
out private brands last year in coffee, snacks, baby food
and other products—is poised to shake up the private-label world with its purchase in August of Whole Foods.
Part of the deal is ownership of 365 by Whole Foods, a
private brand (and briefly a store format concept) that has
the potential to anchor the entire Whole Foods portfolio.
Another potential disruptor is an e-retailer called
Brandless, which went online in July. Brandless offers
many items for $3 and only one option per item, all in
monochrome packaging with bare product descriptions
on identical plain white-label panels. In a way, this reverts
to the black-and-green-on-white, cargo-font “generic”
products of the 1970s that fathered today’s private brands.
Holbrook thinks there’s room for all these iterations of
private brands, in all these retail formats: “I don’t think
there’s any right answer. I think it’s a matter of corporate
Sharoff agrees, saying the identity of a store brand
depends, in the end, on the identity of the store.
“It’s up to the retailer, just like it’s up to the national
brand manager, to decide what is the positioning of their
private label,” he says. “Some retailers have two or three
[product] tiers; some retailers have one tier. But that’s a
retailer decision. Private label is not a thing that you can
describe [as] ‘It’s always this, it’s always that.’ It’s the
retailer’s perception of themselves.”
Store Brand Clout Widens
for Deep-Discount Grocers
For many retailers, but particularly deep discounters,
store brands play a pivotal role in their strategic
playbooks. In fact, when compared with other major
retail channels, the most recent data from Nielsen finds
deep discounters having more than twice the store-brand share of dollars.
Store Brands’ Share by Channel
Deep discounters focus on store brands twice
as much as the next closet channel.
Deep discount 49%
Dollar stores 17%
merchandisers 85% 15%
Source: Nielsen Homescan, Total U.S., 52 weeks ending April 29, 2017, vs. YAGO,
Top 3 Departments for Deep Discounters’
As the bread and butter of deep-discount grocery chains,
store brands make up a majority share of sales in three
represent 30% of all
compared to 20% of
food and beverage
This is driven by both penetration and trips, with consumers making more trips
to purchase store-brand grocery, dairy and frozen products, up 3.3%, 5.7% and
3.7% in trips, respectively, compared to the prior year, than trips made for branded
products from these departments.
Source: FMI’s The Power of
Source: Nielsen Homescan, Total U.S., 52 weeks ended April 29, 2017