Nielsen: Plenty Of Private-Label Opportunities

Private label products are growing faster in the convenience channel compared to other channels, and the segment represents a tremendous growth opportunity for convenience stores, according to The Nielsen Company.

Nielsen is unveiling its analysis and at the NACS Show in Chicago Oct. 4 to Oct. 7.

Nielsen’s research shows that sales of private-label products rose nearly 20% over the last year to reach $826 million in convenience stores, compared to a 15% increase in drug stores and just under 10% in supermarkets. Overall, private-label share is significantly lower in convenience stores – only 1.5% – compared to a 13% share of drug stores’ dollar sales and a nearly 18% share of supermarkets’ dollar sales.

“Convenience stores are just starting to see the potential of private label, said Tom Pirovano, director of industry insights at 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.”

Nielsen’s analysis shows that six of the top-selling product categories in convenience stores – such as carbonated beverages, snacks and candy – are significantly underdeveloped in private label, which represents opportunities for convenience store retailers.

“These products are generally considered strong sellers for convenience stores yet are very underdeveloped in terms of private-label share,” 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.”

Other key findings include:

  • Nationwide, convenience store sales are up 4.1%;
  • Little Rock, San Antonio, Richmond/Norfolk, Boston and Seattle show the biggest growth in convenience store dollar sales;
  • Least amount of growth in convenience store dollar sales is in Tampa, Chicago, Houston, St. Louis and Phoenix;
  • Convenience stores sell more beer, cigars and chewing tobacco than grocery stores, drug stores and mass merchandisers combined.

    Nielsen will unveil more of its enhanced convenience solutions at the NACS Show, including expanded category coverage, an increase of three times in sample size, weekly insights and more granular store-level views.

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