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Retailers of consumer packaged goods maintained steady circular support of their private brands in 2015. According to Market Track Promotional Data, 15.5 percent of circular promotions in 2015 were private brands, only slightly down from 15.6 percent in 2014.
Promotional support of private brands and products varies greatly by retailer, but year in and year out it is easy to distinguish retailers that push private brand products to shoppers from those that lend more support to national brands.
H-E-B, for example, is a strong supporter of its store brands. In both 2014 and 2015, 33 percent of H-E-B’s circular promotions were for private label products — well above the 16 percent industry average.
At the other end of the spectrum are some smaller regional retailers that merchandise significantly less private label and, as a result, provide less promotional support as well. Retailers such as Foodarama in Texas and Marc’s in Ohio allocated less than 5 percent of their circular promotions to store brand products from 2014 to 2015.
Where shifts in private brand promotional support do occur is at the category level. In a study conducted by Market Track reviewing private label’s share of annual category circular promotions for 2014 and 2015, it was revealed that the promotional support for private label products increased by more than 100 percent for certain categories, yet decreased by more than 80 percent for others. To ensure the study focused on relevant categories, Market Track included only categories in which private label accounted for at least 10 percent of circular promotions for the full year in 2014.
The table provides a snapshot of the categories that saw the largest swings in private brand promotional support from 2014 to 2015. Among the 10 categories in which store brands saw the largest decreases in share, seven fell within the health and beauty care (HBC) department. And private label products saw an 84 percent decrease in share of nasal strip category promotions, the largest decrease of any category. Retailers also reduced their support of private brands in the nail care, cosmetic accessories, gauze pads/wound covers, and denture cleansers categories by more than 50 percent in 2015.
HBC categories provide an opportunity area for retailers in 2016. Understanding how the department performed from a sales perspective in 2015 will be critical to making adjustments in promotional strategy this year. If the department lagged behind expectations, a strong case for providing more promotional support to private brands and products can be made. As it stands, shoppers had significantly less incentive to purchase store brand products in the HBC department in 2015.
To see the full table, visit: http://magazine.storebrands.info/t/147322-store-brands/8