- Sprouts, a natural foods retailer with 256 stores in 13 states, said that sales of private label products accounts for more than 10% of sales at its retail stores, according to a recent company earnings call.
- In the company's earnings report, the retailer posted a 0.7% increase in same-store sales in the latest quarter, while its rival, Whole Foods Market, saw decreases in its comps during the same time period.
- Sprouts has experienced 39 consecutive quarters of positive comparable store sales growth.
Sprouts has more than 2,100 private-label products in its stores, ranging from pantry staples to more premium items like coconut milk ice cream and Sriracha ketchup. These products have helped the company increase revenue by as much as 25% over the last four years.
Company CEO Amin Maredia said that private label sales have outpaced the company average in both sales growth and comps, and that there will be added focus on further differentiating its private label line in 2017.
The Private Label Manufacturers Association’s (PLMA) 2016 Private Label Yearbook noted that store brand sales totaled $118.4 billion last year, a record number. That accounted for 17.7% of the total market.
This promotion of private labels is a strategy that many retailers are utilizing. A recent study by TreeHouse Foods found that the appeal of a private label product is less about price and more about the balance between value and quality. Today's private label products are no longer viewed as "generic."
Still, not everyone appreciates private brands. According to a Trace One survey, 44% of consumers won’t buy private label brands because they trust national brands more. This perception will need to change if private labels are going to continue increasing in the years ahead. Retailers can bolster private label brand appeal and status through premium packaging and eye-catching product design, something that consumers equate with high quality and trustworthiness.