Private Labels Head Into 2025 With Major Momentum

Private label brands, such as Walmart’s Great Value, Target’s Good & Gather, and Costco’s Kirkland Signature, have found their way into more homes across America this past year.

There are a few reasons why. First, supply chain issues during the pandemic led to shortages in big-name national brands, forcing many shoppers to give private label products they might have ignored in the past a try.

Second, high rates of inflation for everything from potato chips to toilet paper have steered more consumers toward budget-friendly private label options.

Third, much of the trust and authority national brands created through decades of conventional advertising isn’t reaching or influencing the minds of younger generations, who prefer TikTok over prime-time television.

Indeed, figures from consumer intelligence firm NIQ show two-thirds of Gen Z and millennial consumers now feel private labels are just as good as national brands.

“The stigma of having a Kroger or Trader Joe’s item on your counter when company comes over and you’re entertaining is in the process of evaporating,” said Steve Zurek, vice president of advanced analytics and thought leadership at NIQ.

Rather than reputation, Zurek noted, today’s consumers are concerned with a product’s taste and quality, and whether it provides good value for its price.

Thanks, in part, to this combination of factors, private labels have outpaced national brands on dollar sales in recent years. Data from January through November of this year shows private labels grew 3.2%, while national brands increased 1%.

There are also more private labels to choose from: At present, private labels represent 19.7% of the market, up from 18.6% in 2020.

Store brands, as they’re also called, are increasingly playing a bigger role in influencing which retailera shoppers visit, too. In 2016, about one-third of consumers said private labels play an important role in determining where they shop. Today, the majority say the same.

Additional figures from NIQ indicate most retailers plan to expand their private label offerings.

The majority also intend to invest more into marketing these products in a bid to attract consumers hungry for more affordable alternatives.

Discount grocer Save A Lot, which has around 750 stores across 32 U.S. states, took this approach in the summer of 2022 with a handful of 15-second spots comparing its various private label items with their well-known national counterparts.

“We’re inviting shoppers to try our private label products for their next barbecue,” Tim Schroder, Save A Lot’s former chief sales and marketing officer, said in a statement at the time. “We think they’ll find they’re just as good or better than their national brand equivalents, but they’ll spend a lot less.”