Walmart recently
introduced a higher-end private label brand
For years, the popularity of private-label brands served as a measure of economic health. People stocked up on store brands when pinched,
relaxing into national brands when they felt flush again.
But the explosion of retailer’s tiered offers, often including premium private labels, has changed that dynamic. The Food
Industry Association’s annual consumer analysis finds that while value and price are still the primary reasons for buying a store brand, named by 71% of food shoppers, they increasingly cite
benefits like health, quality and taste, and convenient meal solutions. And 55% of shoppers say the private-label selection informs their store preference.
“Private brands are no longer
just about offering a cost-effective alternative,” writes Steve Markenson, vice president of research and insights for the Arlington, Virginia-based industry association. “They are about
delivering quality, creating new experiences, and highlighting unique values that resonate deeply with today's consumers. In turn, retailers have recognized their portfolio as a strategic
differentiator and an extension of their brand narrative to shoppers.”
Paper products, dairy, frozen foods and packaged breads are the most popular store-brand items.
That
perception of quality – along with a long period of sustained inflation – is changing behavior, with 55% reporting they increased their purchase of these products over the past year and
46% saying they intend to increase their private-label purchases in the coming year. Only 28% have bought more manufacturer brands.
Notably, 51% of the sample are likely to consider private
brands, even if overall grocery prices decrease. The analysis, supported by Circana, says that it indicates loyalty based on quality rather than price. It found that people use words like "good,"
"great," "quality," and "better" when describing their store brand selections.
The vast majority – 94% – purchase store brands at least occasionally, with 45% saying they are
as good or better than national brands and 54% saying they are good enough.
Those perceptions increased sharply from last year when food prices dominated national headlines. For example, 42%
of those in the current research say they buy store brands for their quality, up from 30% last year and 33% for taste, up from 26%.
As a result, dollar sales of store brands for the year
ending March 24 rose 4.5% versus 3% for national brands, Circana reports. And store-brand dollar share climbed to 20.8%, while unit share reached a new high of 25.7%
However, some categories
saw much more significant gains, such as a 33% jump in dollar sales of frozen potato products, a 20% increase in salty snacks, and a 19% rise in yogurt.