Recession, Better Quality Helped Boost Sales Of U.S. Private Label Brands

Sales of private label brands in the U.S. grew 1.8 share points from end of 2007 to account for 22.3 percent of the retail market by end of 2008. Store brands benefited from better quality and reputation and from consumers' search for ways to save as they deal with the effects of the Great Recession of 2008–2009. Nielsen research reveals 75 percent of consumers see store brands as a good substitute for national brands. Since the end of 2008, however, growth in market shares of food, drug, and mass store brands has remained flat, with national brands accounting for a commanding 78 percent of consumer packaged goods sales. To further grow their store brands, retailers need to increase their product variety, maintain the affordability of their products, emphasize quality, and develop robust brand equity. They should also connect with younger consumers without losing their appeal to older customers.