IRI Finds Consumers Still Turning to Private Labels Despite Growing Economy

Millennials Struggling and Purchasing Private Labels to Save Money; Private Label Dollar Sales Up in 2018

CHICAGO--()--Despite the U.S. economy growing at a strong 3.5 percent annual growth rate in the third quarter, 49 percent of consumers are making sacrifices to make ends meet, according to IRI® Consumer Connect™ survey results released today. Consumers are continuing to rely on private label products to stretch their dollars. In fact, the IRI Private Label 2018 report reveals that eight in 10 Americans buy private label products frequently or occasionally in order to save money.

Private label products are quite popular with younger consumers, who tend to be driven more by product benefits than by brand name. Ninety-two percent of millennials are turning to private label products to save money, compared to 86 percent of Generation Xers, 81 percent of baby boomers and 77 percent of seniors.

“The increased likelihood of younger consumers turning to private labels really bodes well for the retail brand sector of the industry,” said Susan Viamari, vice president of Thought Leadership for IRI. “It’s truly a testament to the success private label innovators have had in bringing to market the solutions that fulfill high-demand shoppers’ needs and wants.”

The struggle is real for millennials

The latest IRI Consumer Connect Index further highlights millennials’ financial stress. The Index, which monitors consumers’ financial health and CPG behaviors for factors such as brand loyalty, attitudes toward organic/natural foods and beverages, perception of national compared to store brands and frequency of using retailers’ and manufacturers’ coupons, came in at 97.6 for Q3 2018 for all consumers. This is up slightly compared to Q3 2017 (96.8). However, the current index for millennials is noticeably lower at 94.5 compared to 94.7 in Q3 2017. With a benchmark score of 100, a Consumer Connect Index score of more than 100 reflects consumers who are less price-driven, more loyal to favorite brands and better equipped to maintain their desired lifestyles without changes.

In addition, it is still hard for many to buy groceries, with 33 percent of all consumers having difficulties, compared to 38 percent of millennials, 42 percent of Gen Xers, 34 percent of baby boomers and 19 percent of seniors.

Private labels are enticing

Consumers continue to embrace private label products even though the economy has stabilized. Sixty-nine percent say private label quality is as good as national brands, and 68 percent say private labels offer better value than national brands. Millennials, in particular, have very favorable views of private labels, with 76 percent saying the quality is as good, and 73 percent saying the value is better.

These viewpoints are making a positive impact on private label dollar sales, which increased 5.8 percent compared to 1.5 percent for national brands during the past year. In addition, private label unit sales increased 3.8 percent compared to national brand unit sales decreases of 0.2 percent during the past year.

And it doesn’t stop at quality and value; consumers are selecting which stores they will shop in based heavily on the assortment of private label products offered. The criteria include:

  Millennial     Total

• Good assortment of private label food/beverage solutions

82% 77%

• Good assortment of private label home care solutions

68% 62%

• Good assortment of private label health care solutions

67% 59%

• Good assortment of private label personal care solutions

67% 57%

• Good assortment of private label beauty care solutions

53% 45%

• Good assortment of private label pet care solutions

39% 34%

Performance by channel

There are still a lot of untapped opportunities for retail channels. During the last year, grocery private label performance has underperformed compared to the industry average, with dollar sales growth of 1.2 percent and unit sales declines of 1.7 percent. Within grocery, though, some retailers are showing momentum, such as Fred Meyer and Jewel Osco.

  Dollar Sales % Chg. vs. YA     Unit Sales % Chg. vs. YA

• Total CPG

-2.1% +0.5%

• National Brands

+1.5% (0.8%)

• Private Labels

+1.2% (1.7%)

Club stores are outperforming grocery and all competing channels. This is driven by increases in private label trips and basket size:

  Trips % Chg. vs. YA     Basket % Chg. vs. YA

• Club

+2.5% +3.3%

• Grocery

(0.3%) +1.2%

• Drug

+6.8% (6.2%)

• Mass/Super

(5.1%) +2.9%

• Dollar

(0.3%) (0.9%)

Consumers are hungry for more

The future looks bright for private label, with two-thirds of consumers planning to buy more private label products in the coming six months. This is more prevalent among younger shoppers:

• Millennials


• Gen Xers


• Boomers


• Seniors


“Private brands are not all about price,” added Viamari. “They are evolving with innovation and offer the quality, packaging and assortment that shoppers are seeking. Consumers are looking for more choices, and those retailers and manufacturers who are adjusting their strategy to meet those needs will see greater success.”

About the IRI Consumer Connect Survey

IRI provides new survey results at the end of each calendar quarter covering shoppers’ behaviors and attitudes as they directly relate to their strategies for learning about, purchasing and utilizing CPG and health care products, as well as information regarding perceptions of economic conditions and their ability to provide for their families. For more information about customizing the research for a particular category or industry, please email For IRI Consumer Connect survey results dating back to 2016, click here.

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Shelley Hughes
+ 1 312.474.3675


Shelley Hughes
+ 1 312.474.3675