• by Sarah Mahoney  @mahoney_sarah, November 25, 2024

Private-label store brands continue to gain importance as consumers look for better value and perceive significant quality advantages. And new research from Bain & Co. says that HEB, Costco’s Kirkland, Whole Foods Markets’ 365 and Sam’s Clubs’ Members Mark outshine all competitors.

Shoppers don’t just say these products are a good deal; they are just as good as -- and sometimes better -- than national brands.

In some categories, awareness of brands from these retailers is as much as 18 percentage points higher than the private-label brands offered by other grocers.

The resulting advocacy translates to customers who are seven times more loyal than industry averages, helping these retailers win a share of wallet that is 12 percentage points higher.

Bain, which uses a weighted calculation of a brand’s Net Promoter Score and people’s propensity to select the brand versus other private brands and national brands within a category, based the findings on a survey of more than 20,000 U.S. customers. Respondents rated private-label quality in 19 grocery categories. About half of all grocery shoppers intentionally buy or seek out private brands.

Still, that translates to a penetration of about 22%, which means U.S. stores lag far behind those in Europe, where private-label penetration ranges between 30% and 35%.

By category in the top five, H-E-B comes first in bread and fresh chicken. Costco’s Kirkland is ranked No. 1 in frozen pizza, bottled water, cheese, and trash bags. Trader Joe’s scores highest for chips, pasta, and spices. Whole Foods’ 365 leads in ice cream and packaged salad. Sam’s Club’s Members Mark is tops in packaged coffee, pasta sauce, yogurt, paper towels and toilet paper.

Bain notes these strengths are especially meaningful heading into the grocery-heavy final weeks of the year. A survey focused on holiday food shopping, which included 1,500 consumers, finds that 80% are trying to cut back on overall spending, with 35% explicitly targeting the family grocery budget. Buying more private brands is a favorite tactic, especially among low-and middle-income consumers.