Shopping: 69% of consumers view private label similar, superior to name brands
- InsightTrendsWorld
- Mar 19
- 8 min read
Why it is the topic trending:
Growing Popularity of Private Label: Private label brands are increasingly becoming a significant part of the retail landscape, making their perception among consumers a key area of interest.
Impact on Brand Competition: The shift in consumer perception towards private label has significant implications for national brands and the overall competitive dynamics in the retail industry.
Economic Factors Driving Consumer Choices: Inflation and cost-conscious shopping are likely contributing to the increased acceptance and popularity of private label options.
Retailer Strategies: Retailers are increasingly investing in and promoting their private label brands, making consumer perception of these brands a crucial factor in their success.
Overview: The article discusses two reports from Circana highlighting the growing popularity and positive perception of private label brands among consumers in the US and globally. The reports indicate record-setting sales for store brands, outpacing the growth of national brands. A significant majority of consumers now view private label products as similar or superior in quality to name brands, driven by factors like a narrowing price gap and improved product quality. The growth is particularly strong in club and mass retail channels, with major retailers launching new in-house value brands. Premiumization and innovation are also expected to be major drivers for private label in the future.
Detailed findings:
Private label sales in the US reached a record $271 billion in 2024, a 3.9% increase from 2023, while national brands saw only a 1% increase in dollar sales (PLMA citing Circana data).
69% of consumers view private label as similar or superior to name brands (Circana).
Private label products often look, taste, and have the quality of national brands.
Private label is gaining traction even in categories where it was previously unexpected to compete, such as chocolate candy, sports drinks, carbonated soft drinks, and salty snacks.
Club and mass retail channels are particularly strong for private label, with brands like Kirkland Signature (Costco), Great Value and Sam's Choice (Walmart), and Amazon Saver showing significant presence.
Major retailers launched new in-house value brands in 2024, including Walmart’s Bettergoods, Target’s Dealworthy, and Amazon’s Amazon Saver.
Kroger reported that its Our Brands private label sales exceeded those of national brands in the fourth quarter of its fiscal year 2024.
Premiumization and innovation are projected to be major drivers for private label growth moving forward, potentially requiring more shelf space and offering consumers more options.
Retailers are increasingly partnering with consumer packaged goods companies to improve margins for both private label and national brands.
Key takeaway: Consumer perception of private label brands has significantly improved, with a majority now viewing them as equal or better in quality to national brands, leading to substantial sales growth and a more competitive retail landscape where value and innovation in store brands are becoming increasingly important.
Main trend: The central trend is The Ascent of Private Label: Challenging National Brand Dominance.
Description of the trend (The Ascent of Private Label: Challenging National Brand Dominance): This trend describes the increasing success and consumer acceptance of private label or store brands, which are now considered legitimate alternatives, and in some cases superiors, to traditional national brands. Driven by factors like improved quality, narrowing price gaps, and strategic investments by retailers, private label is gaining significant market share and is no longer perceived as a lower-quality, budget-only option. This shift is forcing a re-evaluation of competitive strategies within the retail and consumer packaged goods industries.
What is consumer motivation:
Value Perception: Consumers are recognizing that private label brands often offer comparable quality to national brands at a similar or slightly lower price point, leading to a perception of better value.
Quality Recognition: The improved quality and product development in private label are now meeting or exceeding the standards of many national brands.
Familiarity and Trust: As retailers invest in their store brands, consumers are becoming more familiar with and trusting of these offerings.
Specific Needs and Preferences: Private label brands sometimes cater to specific consumer needs or preferences that might not be as readily available in national brands.
What is driving trend:
Improved Quality of Private Label: Retailers are investing significantly in the quality, formulation, and packaging of their store brands.
Narrowing Price Gap: While price used to be the primary driver, the narrowing difference in price makes quality a more prominent factor in the decision to choose private label.
Retailer Investment and Promotion: Retailers are increasingly dedicating shelf space, marketing efforts, and resources to promote their own brands.
Consumer Trust in Retailers: Consumers often have a direct relationship and trust with the retailers they frequent, extending to the store's own brands.
Economic Factors: While not always the primary driver anymore, the potential for cost savings with private label still appeals to many consumers.
What is motivation beyond the trend: Consumers might be motivated by a desire to be savvy shoppers, making informed decisions based on quality and value rather than just brand name recognition. There might also be a growing appreciation for the role of retailers in providing a curated selection of their own high-quality products.
Description of consumers article is referring to: The article primarily refers to US consumers based on the Circana data focused on the US market, but it also touches on global trends. This includes a broad range of grocery shoppers across various demographics who are increasingly open to and satisfied with private label brands across different product categories, including food and beverage. The strength of private label in club and mass retail suggests appeal to bulk buyers and value-conscious consumers in those channels.
Conclusions: Private label brands have evolved significantly and are now viewed by a majority of consumers as comparable to or even better than national brands in terms of quality. This shift, driven by retailer investment and changing consumer perceptions, is leading to record sales and challenging the dominance of national brands across various food and beverage categories. Premiumization and innovation are expected to further fuel the growth of private label in the future.
Implications for brands (National Brands):
Focus on Differentiation: National brands need to clearly differentiate their products through unique features, innovation, and strong branding to justify any price premium over private label options.
Highlight Brand Value: Emphasize the specific value propositions that their brand offers beyond basic product quality, such as heritage, specialized expertise, or unique formulations.
Collaborate with Retailers: Partner with retailers to ensure their products are well-positioned and promoted effectively in a landscape where private label is increasingly favored.
Invest in Innovation: Continuous innovation is crucial for staying ahead of private label brands that are also investing in new product development.
Consider Value-Oriented Lines: Explore offering more competitively priced product lines to appeal to price-sensitive consumers who are now considering private label.
Implication for society: The rise of high-quality private label brands can provide consumers with more affordable options and increase competition within the retail industry, potentially leading to better value and innovation across the board.
Implications for consumers: Consumers benefit from having more high-quality options at potentially lower prices, allowing them to manage their budgets effectively without compromising on quality. The increased competition can also lead to more innovation from both national and private label brands.
Implication for Future: Private label brands are expected to continue their growth trajectory, driven by ongoing investment from retailers in quality and innovation. The competition between national brands and store brands will likely intensify, with private label becoming an even more prominent and influential force in the retail market.
Consumer Trend (name, detailed description): Private Label Power Shift: Consumers are increasingly embracing private label brands, recognizing their improved quality and value, leading to a power shift in the retail landscape where store brands are becoming formidable competitors to national brands.
Consumer Sub Trend (name, detailed description): Quality Parity Perception: A significant majority of consumers now perceive the quality of private label products to be on par with, or even superior to, that of national brands, eroding the traditional quality advantage held by name brands.
Big Social Trend (name, detailed description): The Democratization of Choice in Retail: Consumers have more information and are less reliant on brand names, leading to a democratization of choice where they are more willing to explore and adopt private label options based on quality and value.
Worldwide Social Trend (name, detailed description): The trend of rising private label popularity and improved consumer perception is not limited to the US but is a global phenomenon observed in various retail markets, including Australia.
Social Drive (name, detailed description): The Pursuit of Optimal Value: Consumers are driven by a fundamental desire to obtain the best possible value for their money, considering both price and quality in their purchasing decisions.
Learnings for brands to use in 2025:
Don't Underestimate Private Label: Recognize that store brands are no longer just the cheap alternative but are serious competitors.
Continuously Innovate: Keep your product offerings fresh and unique to stay ahead of the curve.
Focus on Building Brand Loyalty Beyond Price: Emphasize emotional connections and unique brand experiences.
Understand the Strengths of Private Label in Different Channels: Recognize where private label has the strongest presence (e.g., club and mass retailers).
Collaborate with Retailers Strategically: Work together to create mutually beneficial outcomes.
Strategy Recommendations for brands to follow in 2025:
Invest in Unique Product Formulations and Features: Differentiate your products in ways that are hard for private label to replicate.
Strengthen Your Brand Messaging: Clearly communicate your brand's unique value proposition and story.
Develop Stronger Relationships with Consumers: Build direct connections through loyalty programs and digital engagement.
Consider Offering Exclusive Products or Packaging for Specific Retailers: This can create differentiation within different channels.
Monitor Private Label Innovations Closely: Stay informed about what store brands are doing and adapt your strategies accordingly.
Final sentence (key concept) describing main trend from article: Private label brands are increasingly viewed by consumers as equal or superior in quality to national brands, leading to significant sales growth and a more competitive retail environment.
What brands & companies should do in 2025 to benefit from trend and how to do it: In 2025, brands and companies should adapt to the growing power of private label by:
Continuously investing in product innovation and differentiation to ensure their offerings provide unique value that private label brands may not be able to easily replicate, thereby justifying any price difference.
Strengthening their brand messaging and focusing on building emotional connections with consumers to foster loyalty that goes beyond just price, making customers less likely to switch to store brands based solely on cost.
Forming strategic collaborations with retailers to ensure their products are well-positioned on shelves and included in promotional activities, recognizing the increasing importance of the retailer-brand partnership in today's market.
Final note:
Core Trend:
Name: Private Label Ascendancy
Detailed Description: Private label brands are gaining significant traction and are now considered strong competitors to national brands due to improved quality and value perception.
Core Strategy:
Name: Differentiate and Collaborate
Detailed Description: National brands need to focus on differentiating their offerings through innovation and build strong partnerships with retailers to thrive in a market increasingly embracing private label.
Core Industry Trend:
Name: Retailer Brand Power
Detailed Description: Retailers are increasingly leveraging their own private label brands as a key strategic asset, impacting competition and consumer choice.
Core Consumer Motivation:
Name: Seeking Quality and Value Alignment
Detailed Description: Consumers are motivated by finding products that offer a strong combination of quality and value, and private label brands are increasingly meeting this need.
Final Conclusion: The continued rise and positive consumer perception of private label brands present both a challenge and an opportunity for the retail and consumer packaged goods industries in 2025. Brands that can adapt to this shifting landscape by focusing on differentiation, value, and strategic collaborations will be best positioned for success.
Core Trend Detailed (words on Core Trend): The core trend of "The Ascent of Private Label: Challenging National Brand Dominance" signifies a major power shift within the retail landscape. No longer relegated to the position of cheaper alternatives, private label brands have evolved to a point where a significant majority of consumers now perceive them as being on par with, or even superior to, national brands in terms of quality. This is driven by substantial investments from retailers in improving the formulation, packaging, and overall presentation of their store brands. As a result, price is becoming less of the sole differentiator, and consumers are increasingly willing to opt for private label based on the perceived value proposition – receiving comparable quality, if not better, for a similar or slightly lower cost. This ascendance of private label is creating intense competition across numerous food and beverage categories, forcing national brands to re-evaluate their strategies and find new ways to highlight their unique value and retain consumer loyalty.
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