PLMA report cites new highs for both dollar volume and share
Private-brand dollar share grew to 16.5% at drug stores last year on total private-label sales of $8.3 billion, PLMA said Tuesday in releasing its 2015 Private Label Yearbook. Dollar volume of store brands in the drug channel edged up 0.3%, compared with a 0.1% dip for national brands, which totaled $42.3 billion in sales.
PLMA noted that over the past three years, annual private-brand sales at drug stores have expanded by roughly $200 million, and private label represents 40% of all annual revenue growth in the drug channel during that period.
Reflecting a trend across retail channels, drug store unit sales of private label declined in 2014, according to PLMA. Store brands saw a 2.2% decrease to 2 billion in unit sales last year, while national brands were down 1.8% to 9.4 billion in units. Consequently, private-brand unit share dipped to 17.3% from 17.4%. Still, PLMA noted, private-label unit share remains much improved at drug stores versus 2012, when it was 16.7%.
The top 10 product categories in private-label dollar volume at drug stores were “a mixed bag of large and small, familiar and unfamiliar,” PLMA observed. Primarily food categories, they included watches and timepieces, milk, ice, ready-to-serve-prepared foods, dairy snacks, spreads and dips, cereal, light bulbs and telephone accessories, shortenings and oil, table syrups and molasses, and frozen vegetables. By units, the top 10 gainers were milk; ice; coffee; cereal, pasta; shortening and oil; frozen vegetables; prepared foods (dry mixes); breakfast foods; and cottage cheese, sour cream and toppings.
Of the 11 departments in the drug channel examined by PLMA, private brands saw dollar sales gains in six and declines in five for 2014. Dollar volume increases were seen in dairy (+1.8%), general merchandise (+0.8%), nonfood grocery (+0.7%), deli (+0.5%), fresh produce (+0.4%) and alcoholic beverages (+0.1%).
By units, just three drug store departments saw store-brand growth: dairy (+1.9%), general merchandise (+1.3%) and nonfood grocery (+0.8%). Private-label unit sales of alcoholic beverages were flat in the drug store sector.
“However, a [dollar sales] drop of four-tenths of a point in the largest single department — health and beauty aids, which accounts for more than half of channel sales — weighed heavily on the overall outcome,” PLMA pointed out. “As for departments in store-brand unit share, seven were down and four were up or even. Again, health and beauty aids, which was off five-tenths, depressed the channelwide total for private label.”
Across all food, drug and mass retail channels (including drug stores, supermarkets, mass merchants, warehouse clubs and dollar stores), private-label sales climbed 2.5% to $115.3 billion in 2014, PLMA reported. Overall store-brand unit sales fell 1.2% to 43.4 billion. National brand sales gained 1.1% to $537.5 billion and were down 0.3% in unit sales to 163.2 billion. Private-brand retail share stood at 17.7% in dollars and 21% in units for 2014.
The PLMA Yearbook used data provided by The Nielsen Co. for the 52 weeks ended Dec. 27, 2014.