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Store Brands Deliver Wins and Help Americans Save This Holiday Season

Gone are the days when private label brands were seen as inferior alternatives to popular, name-brand items. Also known as store brands, these products are typically manufactured by a third party and sold under a store’s name at competitive prices. 

With inflation still chipping away at Americans’ budgets, more shoppers are turning to these options for discounts. Not only are more consumers buying private label products to save money, but higher-income folks reportedly like these goods the most. And more than half of all shoppers rate their value as “excellent” or “above average.” 

Retailers are paying attention to these shifts and increasing their private label offerings with these consumer preferences in mind. As a result, store-brand products are expected to perform well this holiday season, and both Americans and retailers stand to win.

According to Numerator, consumers increasingly say that “price is more important than brand name.” Even as the pace of price increases slowed slightly in November, Americans are feeling the pinch when shopping for groceries, other necessities and holiday items. 

Against this backdrop, along with shortages caused by supply chain issues, consumers are continuing to embrace private labels as practical options. A January 2022 Insider Intelligence survey revealed that a significant number of American adults switched from standard to private label brands in the following categories:

  • 30.3% pantry items (pasta, canned goods, etc.);
  • 20.3% household cleaning supplies;
  • 18.8% personal care products; and
  • 15.1% clothing brands

And these numbers are rising. An InMarket survey comparing private label spending to similar brand name products from January through September 2022 found that more than 70% of all money spent on poultry, meat and seafood went to private label brands. In addition, private labels accounted for more than 73% of spending on dairy products alone. 

Four of the top five private labels (Great Value, Equate, Marketside and Freshness Guaranteed) are from Walmart. The most popular, Great Value, is purchased by 72.7% of U.S. consumers. Even though Walmart’s private labels reach the most consumers, other retailers are catching on and growing their private labels at a faster pace. Target and Aldi own two of the fastest-growing store brands. Aldi’s household product penetration rose 2.3% year-over-year through the second quarter of 2022, and Target’s Favorite Day brand penetration grew by 2.2%.

Additionally, smaller grocery stores have the biggest private label investments in products such as food, beverages and cosmetics. More than three-quarters of Aldi’s sales are in these categories, followed by Trader Joe’s (59.4%), Wegmans (49.4%) and Costco (33.5%). 

With consistent savings and wider selections available, it’s easy to see why shoppers want these products. For example, imagine you go to Target to grab a few last-minute items for your holiday dinner. As you shop, you look at Target’s Good&Gather elbow macaroni ($0.95) compared to Barilla’s ($1.99); Target’s Good&Gather brand of eggs ($2.99) compared to Eggland’s ($3.89); and Target’s Favorite Day eggnog ($2.99) in comparison to Southern Comfort ($3.59). You also decide to grab some extra paper towels, opting for Target’s Smartly 2-pack ($1.29) over Bounty’s ($7.49). In the end, you’ve saved $8.74 by selecting store brands—and the savings stack up the more you shop. The same is true at other retailers, whether it’s Target, Walmart, Amazon, Aldi, Giant, Kroger, Safeway, Trader Joe’s, Wegmans, Costco or CVS across all categories of products. 

As Americans look for discounts this holiday season, retailers’ focus on improving the quality of their in-house brands is a recipe for success.

In its latest Holiday Expectations Report, Daymon expects that 95% of holiday shoppers will seek out store brands this year, as respondents cited greater value, improved selection and quality, and affordability as their top motivators.

Retailers are once again finding ways to respond to customers’ needs by offering more store brand products at competitive prices. At a time when we need to save, these items are a great option for Americans, especially when budgeting for holiday expenses. This trend will likely grow as stores hone in on providing quality alternatives, giving shoppers more ways to save and generating more competition.