That’s not to say that the pandemic has wiped away all of the momentum in 2020, but retailers are focused more on strategies to serve shoppers in a pandemic.
And by the numbers, there is still some momentum behind private brands. In accordance with IRI, the latest Power of Private Brands report said private brand sales outperformed national brand sales early on in the pandemic (up more than 15%) but after May 31, national brands outperformed store brands by a little over 2%. IRI projects $15 to $20 billion in private brand sales growth overall in 2020, a .6% gain in share.
Additionally, the latest report found that 33% of American consumers surveyed said they will purchase “more private brands than before the pandemic” and 13% said they will purchase “much more.” Executives at food retailers feel the same, with 93% of them saying they believe store brands to be “extremely or very important.”
“We’re encouraged that our consumer research suggests one-third of Americans expect to purchase more private brands going forward. We’ll need to maintain momentum for more meals shared at home with private brands, which is supported by the C-suite suggesting major investments in private brands in the future,” Doug Baker, vice president of industry relations, FMI – The Food Industry Association, told Store Brands.
“Both economic and supply chain challenges have influenced the power of private brands during the pandemic,” he said. “Regarding the economy, we often witness upswings in private brand purchases during recessions, and the current state of the economy would suggest consumers are seeking out ways to expand their food dollar. In addition, COVID-19 has affected grocery prices more than nearly any other category of consumer spending, so food prices also play a significant factor for budget-conscious shoppers, supporting store brand selection. As a bright spot for brand owners during the pandemic, out-of-stocks did encourage consumers to try brands that they might not had in the past, including private brands.”
As for private brand opportunities going forward, the report said more than 83% of food retailer executives said fresh foods, such as bakery and deli, represent a major opportunity for private brands.
Retailers will continue to emphasize e-commerce, too. The report said 76% of retailers find home delivery, click-and-collect services and e-commerce as a “major growth opportunity.” Lastly, to help grow private brands, nearly 70% of the retailers surveyed said they may “increase the number of suppliers” in order to diversify supply.
To read the complete report and identify more strategies to power private brands through the pandemic, it can be downloaded here and the FMI has more information for private brands here.
