Private Label CPG Dollar, Unit Sales Continue Growth

March 19, 2010

This article is included in these additional categories:

Analytics, Automated & MarTech | Brand Metrics | CPG & FMCG | Food & Restaurants | Retail & E-Commerce

For the second straight month, private label CPG dollar and unit sales both rose in February 2010. According to research firm The Nielsen Company, during the four-week period ended February 20, 2010, private label CPG dollar sales climbed 2.4% on an annual basis, while private label CPG unit sales increased 0.9% annually.

Dollar Sales Total $6.92B
Dollar sales of prepackaged, UPC-coded CPG goods were $6.92 billion during the most recently tracked four-week period, compared to $6.76 billion during the same period a year earlier. Following four straight months of alcoholic beverages having the highest percentage sales increase of any department, in February 2010 fresh produce sales led all departments with a 16.7% sales increase, rising from $213.3 million to $248.9 million. Fresh meats also experienced a double-digit sales increase, growing 11.9% from $41.7 million to $46.7 million. Alcoholic beverages had the third-highest-percentage sales increase for the month, rising 9.3% from $11.84 million to $12.95 million.

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Unlike January 2010, when dairy was the only department to report a decline in its annual sales percentage, last month both dairy and general merchandise reported lower sales. General merchandise sales fell 4.6% for the month, from $221.33 million to $211.24 million, Dairy sales declined 2.6%, from $1.6 billion to $1.56 billion.

Dollar Segment Share Incrementally Grows
Annual growth for private label CPG goods in terms of dollar segment share was a fraction of 1% for the fourth straight month. Dollar sales of private label CPG goods rose 0.4%, from 17% of the segment in February 2009 to 17.4%, in February 2010. Branded CPG goods accounted for the remaining 82.6% of the segment.

The only departments which experienced an annual positive dollar segment share increase of 1% or more were fresh meat (3.2%), fresh produce (2.7%) and health and beauty aids (1%). Dairy had negative dollar segment share growth for the fifth straight month with negative 0.6%, and combo pack had negative 0.2% dollar segment share growth for the month.

Unit Sales Hit 11.23B
Total unit sales for February 2010 were 11.23 billion, up from 11.3 billion in February 2009. Combo pack unit sales increased 9.2%, from 10.67 million units to 11.65 million units. Packaged meat sales grew 4.6%, from 321.1 million units to 335.9 million units. Dairy sales improved 3.5%, from 1.06 billion units to 1.1 billion units.

As opposed to January 2010, when no department reported negative unit sales growth, in February 2010 five departments did so. General merchandise unit sales dropped 7.2%, from 396.6 million units to 368.2 million units. Health and beauty aids unit sales dropped 5.4%, from 799.6 million units to 756.6 million units. Non-food grocery unit sales dropped 3.9%, from 867.6 million units to 833.6 million units. Fresh produce sales also dropped 3.9%, from 459.4 million units to 441.6 million units. And fresh meat unit sales dropped 1.6%, from 52.6 million units to 51.8 million units.

Unit Segment Share Barely Grows
CPG unit segment share grew even less percentage-wise than CPG dollar segment share last month, increasing 0.1% from 21.7% to 21.9% of the segment. Branded CPG goods accounted for the remaining 78.1% of the segment. CPG unit segment share growth matched CPG dollar segment share growth at 0.5% last month, and had been stronger from May-December 2009.

Fresh produce led all departments with 3.2% unit segment share growth, followed by fresh meat (2.7%) and deli (2.1%). Combo pack lost 2.4% unit segment share, with dairy losing 0.8% and dry grocery losing 0.2%.

Consumers Don’t Strongly Identify with Brands
Although consumer demand for quality brands and products remains strong, consumers generally do not strongly identify with brands, according to interviews conducted by consumer insights firm trendwatching.com. Among other findings from field interviews with global consumers are that consumers do not think brands love them, many consumers think loving a brand is strange, most consumers cannot name the brand of their cell phone, and consumers generally hate brands which engage in practices such as using child or cheap foreign labor.

Consumers Favor Cheaper Liquor
U.S. consumers consumed a slightly higher quantity of liquor in 2009 as compared to 2008, but traded down on quality, according to the Distilled Spirits Council. Liquor sales by volume grew 1.4% between 2008 and 2009, but liquor revenues remained flat at $18.7 billion in 2009.

When 2009 liquor sales volume is broken down by price category, the growing dominance of value-priced brands (including private label) becomes clear. In 2009, U.S. consumers purchased 75.9 million value-priced nine-liter cases of liquor, 40.6% of 186.9 million total cases purchased.

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