CHICAGO—Walmart dominates in private-label household penetration with four of the top five private-label brands, and convenience retailer Kwik Trip ranks among the top five fastest growing private-label brands, according to research by Numerator.
The top private-label brands ranked by household penetration include four Walmart brands: Great Value (purchased by 72.7% of U.S. consumers), Equate (51%), Marketside (44.2%) and Freshness Guaranteed (40%), followed by Dollar Tree (32.5%).
“The days of treating private-label products as untrackable are over,” said Eric Belcher, CEO, Numerator. “With market share now approaching 50% in some major categories, CPG manufacturers need visibility into the brand-level performance of private labels today more than ever before.”
Aldi, Target and Amazon lead in fastest growing private-label brands. Aldi private-label household penetration grew by 2.3 points from the second quarter 2021 to the second quarter 2022, followed by Favorite Day/Target (+2.2 points), Amazon Basics (+1.7), Member’s Mark/Sam’s Club (+1.3) and Kwik Trip (+1.3).
Numerator found that smaller format grocery stores lead in CPG private-label share. More than three-quarters (77.5%) of Aldi’s sales are for private-label products, followed by Trader Joe’s (59.4%), Wegmans (49.4%), Costco (33.5%), Sam’s Club (30%), HEB (26.9%), Walmart (23.3%), Kroger (22.1%), Meijer (15.8%) and Hy-Vee (15.2%).
Target (15.1%), Whole Foods (14.7%) and Publix (13.6%) follow closely behind the top 10 in private-label share within the grocery, household and health and beauty. Amazon captures significantly lower private-label share in these sectors. While Amazon captures higher private label share among its consumer electronics and home goods products, the retailer posts a private-label share of 3% among grocery, household and health and beauty products.
High-income consumers have the most favorable opinions of private-label products. More than half of high-income shoppers (56.9%) rate private-label products’ value as excellent/above average, compared to 55.2% of middle-income and 52.5% of low-income shoppers who said the same.
As inflation continues to rise, price is becoming more important than brand name for many consumers. In recent months, the number of consumers who say price is more important than brand name has grown across all income levels.
More middle- and high-income consumers are buying private label to save money. Nearly two in five high-income (39.5%) and middle-income (38.8%) consumers are purchasing private label as a cost-saving measure.
Within the Grocery sector, private-label brands account for 17.4% of sales, while branded products account for 82.6%. Private-label grocery share in the club channel (32.1%) is about twice that of other channels. Club is followed by mass (22.6% private-label share), online (20.2%), food (18.6%), dollar (9.9%) and drug (4.7%).
Private-label grocery share is lowest among low-income households. Despite a perception of private label as a brand for cash-strapped households, private-label grocery items hold similar share among low-income (17.1%), middle-income (17.9%) and high-income (17.2%) consumers.
Within the Household products sector, private-label brands account for nearly $1 in $5 spent (19.5% of sales), compared to 80.5% for branded items. In the club channel, private-label products account for more than one-third of all Household product sales. Private-label household products share in the club channel (35.5%) is followed by mass (19.4%), dollar (19.2%), food (18.7%), online (13.1%) and drug (8.9%).
Online private-label share continues to grow in the household sector. While online holds the second-lowest share (13.1%) for private-label products, it was the only channel to see consistent growth over the past two years (+3.1 points versus one year ago, +0.6 points versus two years ago).
Health and Beauty
Within the health and beauty sector, private-label brands account for more than $1 in $10 of consumer spend (11.9%, compared to 88.1% for branded items). The dollar channel closely trails the drug channel in health and beauty private-label share. The drug channel represents the highest share of health and beauty private-label sales (18.4%), followed by dollar (17.7%), mass (16.9%), club (14.2%), food (8.7%) and online (5.2%).
Health & Beauty private label share varies across income levels. Among low-income consumers, private-label products account for 17.2% of sector spend, compared to 14.9% for high income consumers.
Learn how private-label brands drive loyalty at c-stores and raise their image for fair prices in this month’s NACS Magazine cover story “An Exclusive Offer” in the digital edition of NACS Magazine.