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Everything you need to know about Own Label performance but didn’t know who to ask

  • SalesOut
  • SalesOut

This short blog assesses how all the disruption to our habits and lifestyles since the outbreak of the pandemic in 2020 has impacted on the performance of Own Label sales. Looking at the data in wholesale, the top-line stat is that Own Label share within the overall market peaked at 15.0% some two years ago, and it’s now sitting at 13.5%.

Own Label vs the whole market

To get a better understanding of what this figure really means, we need to compare Own Label performance with that of the rest of the market. The fact is, the market is down from where it was two years ago. However, while Own Label is still down -7% value and -11% volume, the total wholesale market is faring considerably better at +3% value and +6% volume. 

One wonders if the increasing price of Own Label products might be a contributing factor here. We've seen a +13% rise since last year, with total wholesale flat year-on-year. The potential for customer savings has reduced with the Own Label average price currently sitting at £1.13 vs £1.52 for total wholesale market, with that gap currently getting smaller.

Souped up performance

Digging deeper into the individual categories also makes interesting reading. Two years ago, almost every category was in decline, for brands and Own Label. This year, however, we are seeing strong recovery in many of these categories.

For Own Label, the only three categories to recover value fully over the last two years were Soup (+12%), Non-Food (+10%) and Baby (+1%), leaving everything else in decline.

Tobacco figures on fire

For the total wholesale market, the big winners were Tobacco (+18%), Pet (+11%), Beauty (+8%) and Non-Food (+7%). These growth areas have been enough to deliver positive wholesale market growth. 

However, it’s worth noting that if we ignore those eye-catching Tobacco figures, then the total wholesale market would have declined -3% over the last two years, not up +3% as it currently is.

27% of shoppers actually prefer Own Label

So, that’s what’s been happening at the tills but does consumer opinion tally with the figures? Our recent suggests otherwise. We asked 255 convenience shoppers if both cost the same, would they typically prefer branded or Own Label products.

27% of shoppers declared a preference for Own Label, even if the price was not a factor. A surprising finding when Own Label only accounts for 13.5% of wholesale sales.

When you consider that Own Label is typically around 25% cheaper per unit than the market average, it becomes even harder to understand this discrepancy between the number of customers who prefer Own Label and the sales.

One theory for this is that Own Label shoppers are less affluent and have a proportionately smaller spend. So, where Own Label is perceived to be high quality, you might expect a higher proportion of spend. That would explain why those who shop in M&S were more than twice as likely (+36ppts) to choose Own Label than average.

One to watch in the coming months

Availability, or a lack of it, is another factor that’s relevant here. So, for example, in convenience stores that focus on impulse categories, there will be a higher proportion of brands, whereas stores catering to a broader range of categories are likely to have more Own Label options on the shelf.

These slightly mixed messages have definitely caught our attention. We’re going to keep a close eye on how Own Label performs for the rest of 2022, so we can better understand the influences behind the current trends. Watch this space for further updates…

Published 2 April, 2022

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