Insights on the Changing State of Canada’s Private Label Consumer

Insights on the Changing State of Canada’s Private Label Consumer

Private label products can be found in the pantry of nearly every Canadian home, but who buys private label products occasionally and who buys them on a regular basis? New analysis from The Nielsen Company identifies the heaviest private label buyer and finds that the face of today’s private label consumer is changing.

Insights on the Private Label Consumer

  • Heavy private label buyers are typically from larger households (three or more) with families (kids under age 18); under 45 years old, with higher incomes ($70K plus).
  • Super heavy and heavy private label buyers account for nearly 60 percent of total private label dollar sales.
  • Top private label buyers spend more than the average shopper across all product categories and spend more per shopping trip, with private label products accounting for more than one-third of their total shopping trip bill.
  • The face of the private label buyer is evolving to one person households, age 55 – 64 years, no kids, with incomes of $100K plus.

“Not only is it critical for retailers to know who is buying private label today, but also who will be the primary private label buyers in the future,” said Carman Allison, director of Industry Insights, Nielsen. “As the face of the private label consumer evolves along with general demographic trends to smaller, older, higher income households, retailers need to make sure they are planning for the future by innovating to meet the needs of tomorrow’s private label consumer. This could mean an increased focus on smaller sizes or portion-controlled products, health and wellness offerings such as low fat or low sodium, and premium offerings to attract higher income consumers.”

Insights on the State of Private Label in Canada

  • Fast-moving consumer goods (FMCG) private label sales in Canada remain flat at $11.4 billion, and unit sales are down one percent. National brand dollar sales are up three percent to $50.9 billion while unit sales are up two percent.
  • Canadians spend $844 on private label products annually, up two percent from last year.
  • On average, private label products are 30 percent less expensive than national brands, but the gap, fueled by higher levels of inflation for private label, has slightly narrowed.
  • Canadians spend $12.20 per trip on private label products, up three percent from last year and the average Canadian household makes 69 trips per year to purchase private label products.

“The battle of the brands continues,” said Allison. “Despite the economic downturn, Canadians did not switch from national brands to private label products. National brands are meeting consumers’ needs for value by driving more sales through feature pricing while private label increased prices at a higher rate, narrowing the shelf price advantage. That said, Canadian retailer concentration is increasing, with the top five retailers representing the majority of the grocery trade. This translates to increased private label development.”