<\/p>\n
With grocery prices remaining high, shoppers are constantly looking for ways to save without sacrificing the quality of products they trust.<\/p>\n
Increasingly, this has begun to mean putting more store brands in carts.<\/p>\n
U.S. private-label consumer packaged goods sales have reached $330 billion, accounting for 24% of unit sales and 23% of dollar sales, according to Circana.<\/p>\n
In food and beverages, private-label products now account for roughly 24% of sales value.<\/p>\n
The shift accelerated as high grocery prices pushed consumers to search for less expensive alternatives to national brands.<\/p>\n
But new research suggests that price is no longer the only reason shoppers choose them.<\/p>\n
Ninety-two percent of U.S. grocery shoppers now have private-brand products in their homes, according to FMI-The Food Industry Association.<\/p>\n
Nearly half said they increased their private-label purchases over the past year.<\/p>\n
More strikingly, 94% said they would continue buying store brands even if grocery prices declined.<\/p>\n
This suggests that some of the shopping habits consumers developed during the inflation surge may be sticking around.<\/p>\n
And major retailers like Walmart, Kroger, Costco, and Aldi are investing heavily to make sure they do.<\/p>\n
Store brands are more than a cheaper option<\/p>\n
Private-label products once carried a fairly simple proposition: a similar product at a lower price.<\/p>\n
But retailers are increasingly trying to move beyond that.<\/p>\n
Circana research shows private-label growth has expanded into premium, wellness-focused, sustainable, and indulgent products.<\/p>\n
Here’s some of my coverage of how grocery retailers are changing to win value-conscious shoppers:<\/p>\n
Aldi: The discount grocer is rapidly expanding across the U.S. as shoppers increasingly seek lower prices and store-exclusive products.<\/p>\n
Kroger: Kroger is adding exclusive products and new private-brand offerings as competition from Walmart, Amazon, and discount grocers intensifies.<\/p>\n
Grocery prices: Elevated food costs continue to pressure household budgets, pushing shoppers toward cheaper brands, promotions and value-focused retailers.<\/p>\n
Meanwhile, consumers are increasingly viewing store brands as comparable in quality to national brands.<\/p>\n
FMI found a similar shift.<\/p>\n
Thirty-nine percent of shoppers who increased their private-brand purchases cited quality, up from 30% in 2023, while 37% cited taste, up from 26%.<\/p>\n
Private labels are also influencing where consumers choose to shop.<\/p>\n
56% of consumers said their primary retailer’s store-brand selection is very or extremely important when deciding where to shop, according to FMI.<\/p>\n
That gives retailers another reason to invest in products shoppers cannot simply find at a competing supermarket.<\/p>\n
Costco’s Kirkland Signature is the biggest example of private labels’ success.<\/p>\n
Kevin Carter \/ Getty Images<\/p>\n
Walmart makes bigger push behind Great Value<\/p>\n
Few retailers have more at stake in private label than Walmart.<\/p>\n
Great Value is Walmart’s largest private brand and, according to the retailer, the largest food and consumables CPG brand in the U.S.<\/p>\n
The company says Great Value products are found in nine out of 10 U.S. households.<\/p>\n
Earlier in April, Walmart announced the first complete redesign of the brand in more than a decade, covering nearly 10,000 food and consumables products.<\/p>\n
Walmart says an average family can save about 35% annually by choosing Great Value products instead of comparable national brands.<\/p>\n
But the redesign is not just about price.<\/p>\n
Walmart said the new packaging is intended to improve visibility and make products easier to find in stores and online.<\/p>\n
This is another sign that retailers increasingly want private labels to compete like national brands rather than simply serve as generic substitutes.<\/p>\n
Kroger’s brands growing faster than national brands<\/p>\n
Kroger is seeing similar momentum.<\/p>\n
During its latest quarter, the grocer said its own-brand sales grew faster than national-brand sales, while sales of its premium Private Selection line increased by more than 14%.<\/p>\n
The retailer has been expanding Private Selection, Simple Truth, and Smart Way into additional categories to give shoppers options across different price points.<\/p>\n
Private Selection has also moved beyond basic substitutes for national brands.<\/p>\n
Kroger has introduced premium and limited-time products, including ready-to-eat meals and seasonal offerings, as it tries to build demand for products shoppers can only buy through its stores.<\/p>\n
The strategy reflects a broader shift across the grocery industry.<\/p>\n
Retailers increasingly want shoppers to view their private labels as brands in their own right.<\/p>\n
Aldi shows how far private-label model can go<\/p>\n
Aldi provides one of the direct examples of a grocery business built around that strategy.<\/p>\n
More than 90% of the products Aldi sells are exclusive brands, according to the company.<\/p>\n
That is far above the private-label penetration of most conventional supermarket chains.<\/p>\n
It has allowed Aldi to maintain tight control over its assortment and pricing, something it says sets the retailer apart.<\/p>\n
The discounter has also been refreshing its packaging and placing the Aldi name more prominently across many of its store-brand products.<\/p>\n
For Aldi, private label is not simply another section of the grocery aisle, but a core part of how the retailer operates.<\/p>\n
Costco helped prove model works<\/p>\n
Costco’s Kirkland Signature remains one of the biggest examples of how powerful this model can become.<\/p>\n
Kirkland products are exclusive to Costco and span food, household goods, apparel, and other categories.<\/p>\n
The brand has become a major part of Costco’s value proposition because shoppers cannot buy the same products at Walmart, Kroger, or any other supermarket.<\/p>\n
This exclusivity gives private labels an advantage that national brands cannot provide.<\/p>\n
A shopper who develops a preference for a particular Kirkland product has to return to Costco to buy it.<\/p>\n
Circana said club retailers are now responsible for nearly half of all private-label growth, underscoring how important store brands have become for warehouse chains.<\/p>\n
Will shoppers go back to national brands?<\/p>\n
High grocery prices helped accelerate private-label adoption.<\/p>\n
But the bigger question for retailers is whether consumers will return to national brands if food inflation cools.<\/p>\n
So far, the data suggest many will not.<\/p>\n
FMI found that nearly all shoppers expect to continue purchasing private brands even if grocery prices decline.<\/p>\n
Younger consumers appear particularly receptive.<\/p>\n
60% of Gen Z shoppers and 61% of millennials said a retailer’s private-brand assortment is very or extremely important when deciding where to shop.<\/p>\n
Inflation may have pushed consumers to experiment with less expensive alternatives.<\/p>\n
But quality, taste, and familiarity may be helping keep those products in their carts.<\/p>\n
National brands, however, are not disappearing from grocery shelves anytime soon.<\/p>\n
Large consumer brands still generate substantially higher total sales and maintain strong loyalty across many categories.<\/p>\n
But private labels now account for nearly one-quarter of U.S. CPG unit sales, giving retailers a much larger share of shoppers’ baskets than they once had.<\/p>\n
And unlike national brands that can be sold across competing chains, Great Value, Private Selection, Kirkland, and Aldi’s exclusive brands keep customers tied to a specific retailer.<\/p>\n
As shoppers continue watching grocery bills closely, retailers have little incentive to slow their private-label push.<\/p>\n
What began largely as a way for consumers to save money is increasingly becoming one of the biggest battlegrounds in grocery retail.<\/p>\n
Related: Americans are eating out less, but one restaurant chain is surging<\/p>\n
#Walmart #Aldi #Kroger #follow #Costco039s #lead<\/p>\n","protected":false},"excerpt":{"rendered":"
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