Huge Growth Opportunities for Private Label in Convenience Stores

Convenience Store Research, Nielsen Product Enhancements to be Unveiled at NACS Show

Schaumburg, IL

Private label products, or store brands, are growing faster in convenience stores compared to other stores and represent a tremendous growth opportunity for the convenience channel, according to new research by The Nielsen Company. A leader in convenience store solutions, Nielsen will unveil its analysis as well as new product enhancements offering the industry’s most accurate and representative view of the convenience store channel at the NACS (The Association for Convenience and Petroleum Retailing) Show in Chicago October 4 – 7.

Nielsen’s research shows that sales of private label products rose over the last year nearly 20 percent to $826 million in convenience stores, compared to a 15 percent increase in drug stores and just under 10 percent in supermarkets. Overall, private label share is significantly lower in convenience stores – only 1.5 percent – compared to a 13 percent share of drug stores’ dollar sales and a nearly 18 percent share of supermarkets’ dollar sales.

“Convenience stores are just starting to see the potential of private label, said Tom Pirovano, director of industry insights, The Nielsen Company. “While private label dollar growth has been driven more so by higher unit prices, versus a shift from traditional brands, we do see private label unit sales up in recent weeks. The convenience channel has an opportunity to develop their own store brands using private label benchmarks at supermarkets and drug stores.”

Opportunity Knocks
Looking deeper, Nielsen’s analysis shows that six out of the top-selling product categories in convenience stores, such as carbonated beverages, snacks and candy, are significantly underdeveloped in private label, representing opportunities for convenience store retailers.

“These products are generally considered strong sellers for convenience stores yet are very underdeveloped in terms of private label share,” said Pirovano. “Now more than ever is the perfect time for convenience store operators to expand their private label offerings. Although store brands generally deliver higher margins, private label products can also convey a value image that many shoppers are looking for during times of economic uncertainty.”

Additional Findings
Other key findings include:

* Nationwide, convenience store sales are up 4.1 percent.1
* Little Rock, San Antonio, Richmond/Norfolk, Boston and Seattle show the biggest growth in convenience store dollar sales.2
* Least amount of growth in convenience store dollar sales is in Tampa, Chicago, Houston, St. Louis and Phoenix.
* Convenience stores sell more beer, cigars and chewing tobacco than grocery stores, drug stores and mass merchandisers combined.

Nielsen at the NACS Show
Nielsen is the leader in convenience store solutions with the most accurate, representative and reliable view of the convenience store channel and unlike other industry offerings, covers both scanning and non-scanning stores. Learn more about the launch of Nielsen’s enhanced convenience solutions at booth 6901 at the NACS Show in Chicago October 4 – 7. Enhancements include expanded category coverage, an increase of three times in sample size, weekly insights and more granular store level views.

NACS Show attendees can learn more about Nielsen’s convenience store research at Tom Pirovano’s presentation, “Categories, Packaging and Pricing in the Convenience Store Channel” on Sunday, October 5 at 10:45 a.m.

About The Nielsen Company
The Nielsen Company is a global information and media company with leading marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in New York, USA. For more information, please visit, www.nielsen.com.

1 Nielsen Convenience Track, YTD dollar sales ending 8/9/08 vs. one year ago.
2 Based on 30 markets tracked. Nielsen Convenience Track, YTD dollar sales ending 8/9/08 vs. one year ago.