Private Label Here to Stay Globally

March 9, 2011

nielsen-private-label-purchasing-during-downturn-global-mar11.gifWhile more than half (61%) of online global consumers surveyed said they purchased more private label brands during the economic downturn, fully 91% said they will continue to do so when the economy improves, according to new data from The Nielsen Company. Consumers in Asia-Pacific and Latin America (62% each) were slightly more likely to say they purchased more private label brands, and consumers in North America and Europe (60%) were slightly less likely.

Consumers in the Middle East/Africa/Pakistan (MEAP) region met the 61% global average of having purchased more private label goods during the economic downturn.

North Americans Most Likely to Continue Buying Private Label

nielsen-private-label-purchasing-continued-trend-mar11.gifInterestingly, although North American consumers tied their European counterparts for being least likely to have increased their private label purchase habits, they had a higher rate of saying they will continue to do so after the recession ends (94%) than consumers in any other region.

Following this trend, European consumers were the next-most likely (92%). The only region with a positive response rate to this question significantly different than the global average of 91% were those in MEAP. Only 80% of MEAP consumers indicated they plan to continue buying more private label goods, fully 12% below the global average.

Private Label Trend Precedes Recession

On a global scale, Nielsen data indicates the impact of the economic environment on private label has played a more marginal role. Looking at a comparison across markets, there is a slow, but steady continuation of private label progress, which Nielsen says is actually the result of more retailers deploying private label products in a growing number of categories, a phenomenon that’s continued for more than two decades.

Mid-market Brands Feel Impact

Nielsen analysis of global private label trends suggests the victims of this transformation are the small and medium brands that get de-listed in favor of private label. Generally, the leading brands in the category are not suffering and private label isn’t fatal for healthy brand leaders.

For example, in Europe where private label is most developed, Nielsen data shows store brands still only capture an average 35% market share. In the US, private label’s market share is still less than 20%.

Dec. US CPG Dollar Sales Flat

Following flat year-over-year performance in October 2010, and a roughly 2% November 2010 increase, US private label CPG dollar sales remained flat in December 2010, according to other recent data from The Nielsen Company. Meanwhile, private label CPG unit sales declined 2.3%, following drops of 1% in November 2010 and 3% in October 2010. Private label CPG dollar sales rose 0.7% year-over-year in October 2009, while unit sales rose about 0.2%.

About the Data: Nielsen surveyed more than 27,000 respondents across 53 countries in 2010.

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