Growth of the private-label market in recent years has been driven by demand from lower-income shoppers as well as budget-conscious millennials. But these products are attracting wealthier consumers, creating yet another challenge for national brands.
According to an IRI survey released last week, over half (52%) of consumers with household income of more than $100,000 said they expect to buy more private-label products over the next six months. For those earning $55,000 to $99,000, 62% planned to do the same.
Those percentages are still smaller than the responses among consumers making less than $35,000 and millennials in general (76% and 74%, respectively). However, the private-label buying plans among the more affluent were higher compared with previous findings, according to IRI.
Store brands’ share—both in terms of dollar sales and units purchased—among those earning at least $100,000 grew either at the same rate or faster than all the other lower-income cohorts. In the year ended September 10, 18% of the CPG units bought by shoppers in that income segment were private label. Comparatively, that figure was 20% for those in the $70,000 to $99,900 income bracket, just slightly lower than the 21% for the lower-income group.
“Back in the day, private label was a generic knock-off, often thought to be of inferior quality,” Susan Viamari, vice president of thought leadership at IRI, told eMarketer Retail. “We have seen a major change in perceptions around private label.”