Private label growing in convenience stores
October 02, 2008
by FoodBusinessNews.net Staff
SCHAUMBURG, ILL. — Private label products are growing faster in convenience stores compared with other stores and are a growth opportunity, according to The Nielsen Co.
"Convenience store are just starting to see the potential of private label," said Tom Pirovano, director of industry insights for Nielsen. "While private label dollar growth has been driven more so by higher unit prices versus a shift from traditional brands, we do see private label unit sales up in recent weeks. The convenience channel has an opportunity to develop their own store brands using private label benchmarks at supermarkets and drug stores."
Sales of private label products in convenience stores were up almost 20% to $826 million compared with a 15% increase in drug stores and less than 10% in supermarkets. Private label share is lower in convenience stores at 1.5%. This compared with 13% in drug stores and 18% in supermarkets.
Nielsen said six top-selling categories — carbonated beverages, snacks, candy, sports drinks, bottled water and milk — are underdeveloped in private label and represent a growth opportunity.
"These products are generally considered strong sellers for convenience stores yet are very underdeveloped in terms of private label share," Mr. Pirovano said. "Now more than ever is the perfect time for convenience store operators to expand their private label offerings. Although store brands generally deliver higher margins, private label products can also convey a value image that many shoppers are looking for during times of economic uncertainty."