FMI Power of Private Brands
Daymon Private Brand Intelligence Report
Alvarez & Marsal Store Brands: Driving Growth And Building Loyalty
Private brands have a long history in the grocery industry and the trends in this market are ever-changing. Over the past two years, consumer behavior has shifted from pre-pandemic ways and with inflation and economy concerns looming, private brands are anticipated to be more popular than ever. Private brands saw an increase in sales during the pandemic when the supply chain could not keep up with the national brands. This drove consumers to try private brands rather than driving to different stores to find the national brands. This allowed a new segment of consumers to become more aware of private brands and their benefits.
Research shows that many consumers who have tried these private brands have become loyal to them and make routine purchases of these products now at every visit. Inflation is accelerating this loyalty. Retailers carrying a variety of private brands will see an increase in overall store loyalty. Carrying private brands increased the number of primary store shoppers by 41%.
So why private brands? There are a few reasons that carrying private brands in your store will help you in the long run. Private brands increase profitability and working capital. Simply put, retailers will generate additional profits by making private label growth a priority. When retailers focus on promoting private labels as well as national brands, they see an increase in sales of the private brand. Additionally, adding these brands to your shelves will capture customers and drive category leadership. If you push these brands to consumers, it will inevitably create more brand awareness that will translate into brand loyalty. When you have brand loyalty you can then push into new categories of products that have a higher margin. Thus, making your store more money, on a better value brand. Research shows that 10+ retailers have built $100 billion-plus in-store brands. 56% of consumers choose to purchase private label products. This is a 100 billion dollar increase you do not want to miss out on.
Value and Innovation
Consumers now more than ever are focused on the value of the products they are purchasing and are looking for brands that can offer new and innovative products.
