It will come as no surprise that four of the top five private labels are in the portfolio of retail giant Walmart, but when it comes to private label market share in terms of volume and growth, no one beats small-format discount grocer Aldi.
These are two of the findings of new private label trend research from Chicago-based consumer data specialist Numerator. And here’s a third: As inflation continues to squeeze American grocery budgets, more and more consumers are ready to switch from national brands to house brands.
Aldi dominates the private label share of groceries, household, health and beauty products, which account for more than three-quarters (77.5%) of its total sales, Numerator’s Private Label Trend Tracker shows. Around 90% of items in Aldi stores are own brands.
Another private label-focused grocer, Trader Joe’s, trails far behind in private label spend share at 59.4%, followed by Wegmans Food Markets (49.4%), Costco Wholesale (33.5%) , Sam’s Club (30%), HEB (26.9%), Walmart (23.3%), Kroger (22.1%), Meijer (15.8%), Hy-Vee (15.2%), Target (15.1%), Whole Foods (14.7%) and Publix (13.6%).
Aldi’s brands are also the fastest growing, increasing private label household penetration by 2.3 points from Q2 2021 to Q2 2022. The other fastest growing store brands fast during this period were Target’s Favorite Day (+2.2 points), Amazon Basics (+1.7), Sam’s Club’s Member’s Mark (+1.3), Kwik Trip (+1.3), Wawa (+ 1.1) and Kwik Trip/Nature’s Touch (+0.9). Sheetz, Trader Joe’s and Kirkland Signature (Costco) all increased household penetration by 0.8 points during this period, while Great Value (Walmart), Good & Gather (Target), 7-Select (7-Eleven ), Publix and RaceTrace increased by 0.7. points.
Meanwhile, Walmart holds the top four private label brands during this period, ranked by household penetration, with Great Value (purchased by 72.7% of U.S. consumers), Equate (51%), Marketside (44, 2%) and Freshness Guaranteed (40%). Dollar Tree ranks fifth with 32.5%, followed by Kroger (30.9%), Aldi (30.5%), store brand Walmart (29.8%), Costco’s Kirkland Signature (28.4 %) and Sam’s Club’s Member’s Mark (26.5%).
“The days of treating private label products as untraceable are over,” according to Eric Belcher, CEO of Numerator. “With market share now approaching 50% in some major categories, CPG manufacturers need visibility into private label performance at the brand level more than ever.”
In today’s inflationary environment, price is becoming more important than brand name for consumers at all income levels, and they are turning to private label to save money. Numerator research shows that nearly two in five high-income (39.5%) and middle-income (38.8%) consumers purchase private labels as a cost-cutting measure. More than half of high-income shoppers (56.9%) rate their value as excellent or above average, compared to 55.2% of middle-income shoppers and 52.5% of low-income shoppers.
Despite the perception of private label as a brand for cash-strapped households, the share of private label grocery products was similar across all income levels, at 17.1% for low-income households , 17.9% for middle-income households and 17.2% for high-income households. .
Other key private label findings by Numerator include the following:
• Private label represents 17.4% of sales in the grocery sector, while branded products account for 82.6%.
• The share of groceries in the own-brand club channel is 32.1%, followed by mass distribution (22.6%), online (20.2%), food (18.6 %), the dollar (9.9%) and drugs (4.7%).
• Amazon only captures 3% of private label share in the grocery, household and HBC sectors combined.
Within the household products sector, house brands account for nearly $1 out of $5 spent (19.5% of sales), compared to 80.5% for branded items. In the club channel, private labels represent 35.5% of all sales of household products, followed by mass distribution (19.4%), dollars (19.2%), food (18. 7%), online (13.1%) and medicine (8.9%). Online is the only channel to have experienced steady growth over the past two years (+3.1 points compared to a year ago, +0.6 points compared to two years ago).
And in health and beauty care, private labels account for more than $1 of every $10 of consumer spending, or 11.9%, compared to 88.1% for branded items. The drug channel leads HBC brand sales with 18.4%, followed by dollar (17.7%), mass (16.9%), club (14.2%), food (8.7%) and online (5.2%). The share of HBC private label brands varies across income levels, with sector spend of 17.2% among low-income consumers versus 14.9% among high-income consumers.
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