Consumer Products & Services

Private Label Sales Eating Into Branded
Consumer Products

During economic downturn, consumers prefer to avoid outside eateries and opt for at-home meals. This in turn leads to strong growth for both branded and private label offerings in some basic food categories. In the U.S. market, consumers are continuing to purchase private label products at an increasing rate. Both private label sales revenue and sales volume has shown significant annual growth for the 52-week period ended July 11, 2009.

Within food, drug and mass-merchandisers (including Walmart) categories, sales revenue for private labels grew by 7.4% to $85.9 billion,and their share increased by 0.7 points to 16.9% for the 52 weeks ended July 11, 2009. Similarly, the sales volume posted a high growth of 5% to 39.5 billion units and unit share rose by 1.3 points to 17.5%.

Lower-priced U.S. retailers posted better-than-expected sales results in August as consumers looked for avenues to save money in the key back-to-school season, leaving luxury chains struggling. Overall, the pace of retail sales declines in the U.S. slowed in August, as the back-to-school shopping season neared its close, but results still fell short of anything that can be described as a consumer recovery.

Across the retail sector, same store sales continued their decline of the last 12 months, with discount chains faring the best.

The following table lists select U.S. retail companies that have reported August sales at stores open at least a year – a key retail measure also known as same-store sales.

A survey conducted by the U.S. International Council of Shopping Centers showed that the comparable chain store sales fell 2.0% in August from a year earlier.

As the numbers show, discounters did a bang-up business in the month. Penny-pinching consumers were eyeing bargains for kids' clothing and school supplies ahead of school-opening.