Private Label CPG Dollar Sales Climb

September 15, 2010

Private label CPG dollar sales rose 2.5%, while unit sales fell 0.7%, during the four-week sales period ended August 7, 2010, according to research firm The Nielsen Company.

In contrast, CPG dollar sales rose 1.4% during the four-week period ending August 8, 2009, while unit sales climbed 4.1%.

Dollar Sales Total $6.7B
Dollar sales of private label prepackaged, UPC-coded CPG goods were $6.68 billion during the most recently tracked four-week period, compared to $6.51 billion during the same period a year earlier. Fresh meat experienced the strongest sales growth rate of any department, rising 26.1% from $39.5 million to $49.9 million. Fresh produce followed closely with 25.3% growth, rising from $181.9 million to $227.9 million.

No department experienced a year-over-year decline in dollar sales.

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Dollar Segment Share Rises Again
Annual growth for private label CPG goods in terms of dollar segment share rose fractionally for the ninth straight four-week period. Dollar sales of private label CPG goods increased 0.5 percentage points, from 17% of the segment to 17.5%. Branded CPG goods accounted for the remaining 82.5% of the segment.

Every department except dry grocery and packaged meat, which slightly declined, and alcoholic beverages, which remained flat, experienced positive annual dollar segment share growth. Five departments experienced an annual positive dollar segment share increase of 1% or more: fresh meat (4.3%), fresh produce (3%), combo pack (2.9%), deli (1.2%), general merchandise (1.2%) and health and beauty aids (1%).

Annual segment share growth in the packaged meat department declined 0.2% and in the dry grocery department declined 0.1%.

Unit Sales Fall to 3.05B
Total unit sales for the four weeks ended August 7, 2010 were 3.05 billion, down 0.7% from 3.07 billion during the equivalent four-week period in 2009. Fresh meat sales rose 22.6%, from 8.9 million units to 10.9 million units. Combo pack sales rose 22.1%, from 1.7 million units to 2.1 million units. Fresh produce sales climbed 21.8%, from 72 million units to 87.7 million units.

On the negative annual growth side, packaged meat sales fell 7.6%, from 59.6 million units to 55 million units, while daily sales fell 3.8%, from 692.4 million units to 668 million units. Dry grocery sales declined 1.3%, from 1.44 billion units to 1.42 billion units.

Unit Segment Share Stays Flat
Unit segment share improved upon a recent trend of negative growth that lasted for the previous three straight four-week periods by staying flat. Private label CPG goods accounted for 21.8% of the segment, identical to their share a year earlier. Branded CPG goods accounted for the remaining 78.2% of the segment.

Four departments reported negative unit segment growth. On the positive side, combo pack and fresh meat tied for the highest growth rate (3.7%), followed by fresh produce (2.6%), general merchandise 1.7%, and non-food grocery (1%).

Meanwhile, only one department had a negative unit segment growth rate of more than 1%, dairy (1.2%).

Pressures Push Down CPG Prices
Lower consumer packaged goods (CPG) prices have been beneficial for consumers but are hurting retailers and manufacturers, according to other recent data from The Nielsen Company.

Nielsen’s recent review of retail prices found that during the 44-week period ending June 12, 2010, prices were off or flat compared to a year ago, providing exceptional value to consumers, but weakening trends for retailers.

Unit prices have been dropping sharply since March 2009, and the number of items on promotion has gone up. When one store slashes prices to gain competitive advantage, others follow suit. Meanwhile, brands have resorted to more promotions to stimulate sales and stem the growth of private labels.

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