Amazon has been attempting to gain share in the grocery industry for years with the release of Amazon Fresh, Prime Now delivery, and its acquisition of Whole Foods in 2017. But the company’s private brand food offerings are slim — a major shortcoming when looking at current grocery trends.
According to a Nielsen report, private labels posted dollar growth of more than three times the rate of branded products in Q4 of 2017. Store brands now make up 17% of all grocery sales, according to the Private Label Manufacturers Association, and could grow market share by as much as 10% over the next decade.
Private labels will increase dramatically over the next four or five years, Matt Sargent, SVP Retail at Magid recently told Food Navigator.
This is because retailers will recognize that store brands sell at a higher profit margin, offer points of differentiation and improve customer loyalty. For Amazon, private labels give the company more control over shipping and distribution so they can reliably ship products to Prime members within the promised two days.
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