A new report by Planet Retail has forecast that the top 30 grocery retailers in North America will generate some US$209bn by 2014 through the sale of private label products, an increase of 40 per cent on current figures.
According to the report, entitled 'Private Labelling in North America: Fertile Ground for Growth', private label sales will account for 24.1 per cent of total grocery revenue by 2014.
Leading the way is international grocery giant Walmart, with the retailer's private label business larger than competitors Kroger and Costco's sales combined.
'The relaunch of Great Value combined with the effects of its SKU rationalisation programme has led to improved visibility of private label, resulting in an increase in category sales,' said Natalie Berg, global research director at Planet Retail. 'In the US, the Great Value line alone generates US$12.5bn in sales. We expect this to increase 60 per cent by 2014, making it a US$20bn brand.'
Aldi remains a key player in the private label rankings, placed third compared with 19th place in the overall sales list for North American retailers, and the group is expected to generate US$15bn in private label sales by 2014.
Planet Retail suggested that new discount formats including Joe V's and Sobey's FreshCo would drive private label sales, while hybrid drugstore/supermarkets would also look to private label as a means of differentiation in food and HBC categories.
'Looking to the future, the effects of SKU rationalisation and the emergence of new discount formats will continue to breed private label growth in North America,' Ms Berg added. 'Increased competition from private labels will require genuine innovation from brand manufacturers.'
