Shopping private label brands is something that most adults currently do or would feel comfortable doing. Private label products are widely perceived for being good value for the price, which likely contributes to consumers feeling like they are a smart shopper when buying these products. But shopper loyalty to private label brands is no longer linked solely to price. True value is more than just being the lowest price on the shelf. Discerning shoppers want the whole package – high quality, unique ingredients or design, competitive pricing – from a retailer that reflects their personal values or lifestyle. Retailers are leveraging private label to garner market share across categories with a unified brand presence that can build loyalty. Private label brands are increasingly innovating to meet consumers’ expectations by offering unique and diverse products that cater to a variety of tastes and interests, offering both a sense of novelty and value. Such innovative efforts are being rewarded with increased engagement now (68% are shopping private label brands more this year) and in the coming years (59% plan to purchase more in the future). Moving forward, industry players can continue to advance store brand market share by leaning into the emotional high shoppers experience when getting a good deal or finding a share-worthy dupe.
This report looks at the following areas:
- Impact of macroeconomic factors on private label shopping
- How financial status, generation and parental status impact category engagement
- Shopper perceptions of store brand vs name brand
- Purchase incidence of private label by category, with consumer expectations for future purchases
- Consumer comfort with store brand purchases by retailer
- Purchase rationales that lead shoppers to choose store brands over name brands
- Factors that would prevent consumers from buying private label products
- Attitudes and behaviors toward shopping for private label with considerations of price, quality, and emotional impact
Discerning shoppers want store brands to deliver a comprehensive package – quality, unique ingredients or design, and competitive pricing.
Vince DiGirolamo, Director, North America Reports
Market Definitions
For the purposes of this Report, Mintel has used the following definitions: private label/store brand products are products that are manufactured by one company, and sold under the company name or a different brand name created exclusively by that company. These brands are often positioned as more affordable alternatives to national brands, allowing retailers to offer a variety of products at different price and quality levels to meet diverse consumer needs and preferences.
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Executive Summary
- What you need to know
- Market predictions
- What consumers want & why
- Opportunities
- Store brands aren't guaranteed success
- Opportunities for store brand marketing
- Tiered store brand strategy helps retailers meet varied consumer needs
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Market Dynamics
- Market context
- Market drivers
- The US expanded by 3% in Q2 2024
- Graph 1: quarterly real GDP growth, 2020-24
- Annual inflation is within range of the Federal Reserve's 2% target rate
- Graph 2: headline CPI and core CPI, 2021-24
- Consumer sentiment rebounds after a number of months on the slide
- Graph 3: consumer sentiment index, 2022-24
- Over 40% of consumers have seen their financial situations change for the better in the past year
- Graph 4: change in financial situation over the past 12 months, 2024
- Households' growth in finances has primarily been driven by salary gains
- Graph 5: income growth over the past 12 months, by change in financial situation, 2024
- Households' outlooks on their personal finances remains bullish
- Graph 6: income growth in the past 12 months, by financial outlook, 2024
- Graph 7: opinions on financial future, 2024
- Restricted financial situations drive consideration of private label purchases
- Graph 8: openness to shopping private label this year, by financial situation, 2024
- Shifting perceptions of private label among younger generations
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Consumer Insights
- Consumer fast facts
- Consumer fast factsFast facts
- Consumer fast facts (cont.)
- Private label categories
- Private label has widespread purchase incidence for food, household essentials and OTC medications
- Graph 9: private label categories purchased, 2024
- Generational divide in approach to private label categories
- Graph 10: private label categories purchased, by generation, 2024
- Private label categories with high penetration and satisfaction
- Graph 11: private label categories with high purchase incidence and satisfaction, 2024
- Private label categories with strong consumer interest…
- Graph 12: private label categories with least engagement but strong interest, 2024
- …need to clear the confusion on brand positioning
- Graph 13: private label categories with highest consumer uncertainty, 2024
- Private label purchases and future expectations
- Majority of adults are open to shopping private label brands more this year
- Majority plan to buy more private label in the future
- Graph 14: future purchases of private label, 2024
- Growth opportunity for hard goods private label categories
- Graph 15: store/private label purchase history and future expectations, by category, 2024
- Parents see private label part of their future shopping repertoire
- Graph 16: future purchases of private label, by parental status, 2024
- Graph 17: openness to shopping private label categories in the future, by parental status, 2024
- Challenging categories for private label in the future
- Graph 18: private label categories with most consumer resistance, 2024
- Private label vs name brands
- Store brands are widely accepted as offering better value than brand names
- Graph 19: value perceptions of private label vs store brand, 2024
- Brand name items aren't always higher-quality than private label
- Graph 20: quality perceptions of private label vs store brands, 2024
- Majority can tell the difference between private label and brand names
- Graph 21: differences between private label and brand name, 2024
- Older generations perceive private label as meeting value/quality nexus
- Graph 22: private label vs store brand, by generation, 2024
- While parents are open to shopping private label brands, there is room to improve perceptions
- Graph 23: private label vs store brands, by parental status, 2024
- Acceptance of private label by retailer
- Consumers are comfortable with the idea of shopping private label
- Mass merchants, grocers, and Amazon have strongest acceptance of private label
- Graph 24: acceptance of retailer private label, 2024
- Boomers most likely to accept private label across retailers
- Graph 25: acceptance of retailer private label, by generation, 2024
- Parents are comfortable buying private label at dollar stores and c-stores
- Graph 26: acceptance of retailer private label, by parental status, 2024
- Consumers' financial situations influence their openness to shopping private label across different retailers
- Graph 27: acceptance of retailer private label, by financial status, 2024
- Reasons for choosing private label over name brand
- Price remains the driving reason behind private label purchases
- Graph 28: reasons for choosing private label over name brand, 2024
- Aside from price, better quality is a leading rationale among Gen Z, while comparable quality at better price is a top driver for Boomers
- Graph 29: reasons for choosing private label over name brand, by generation, 2024
- Parents are influenced by factors beyond price
- Graph 30: reasons for choosing private label over name brand, by parental status, 2024
- Barriers to purchase
- Despite widespread acceptance, barriers exist
- Poor quality remains the biggest concern
- Graph 31: barriers to private label purchases, 2024
- Boomers' trepidation stems from poor previous experiences with private label, associating poor quality and not enough price difference
- Graph 32: barriers to private label purchases, by generation, 2024
- Increasing awareness of private label options may dismantle some barriers to purchase
- Graph 33: barriers to private label purchases, by parental status, 2024
- Attitudes toward private label
- Private label purchases evoke sense of pride as a smart shopper
- Graph 34: attitudes toward private label, 2024
- Younger generations and parents feel pride using private label
- Graph 35: attitudes toward private label, by parental status, 2024
- Graph 36: attitudes toward private label, by generation, 2024
- Private label shoppers are more likely to seek out store brands before looking at name brands
- Graph 37: attitudes towards shopping private label, 2024
- Key cohorts more likely to wait for a sale of a brand name than buy store brand alternative, despite shopping store brands first
- Graph 38: attitudes toward shopping private label, by generation, 2024
- Graph 39: attitudes toward shopping private label, by parental status, 2024
- The value proposition is strong for private label
- Graph 40: attitudes toward price/value of private label, 2024
- Inflation and affordability drive private label acceptance budget-conscious
- Graph 41: attitudes towards price/value of private label, by financial status, 2024
- Brand identity of retailer extends to store brand
- Graph 42: attitudes toward quality of private label, 2024
- Gen Z and Millennials see store brands as an environmentally friendly alternative
- Graph 43: attitudes toward quality of private label, by generation, 2024
- Parents choose retailer because of private label brands
- Graph 44: attitudes toward quality of private label, by parental status, 2024
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Innovation and Marketing strategies
- Launch activity and innovation
- Private label themes evident in innovation: elevated, convenient, and collaborative
- Walmart's bettergoods aims to make culinary experiences accessible
- Petco expands its private label lifestyle brand into home goods
- Walgreens launches premium private label skin care
- Kroger debuts convenient premium private label meal solutions
- 7-11 expands private label on-the-go meals and beverages
- Circle K launches private label wine aimed at shoppers looking for quality and convenience
- JCPenney collab with celebrity stylist to bring fashion and luxury to store brands
- Dillard's collabs with fitness expert for athleisure apparel
- Marketing and advertising
- Store brands serve as a platform for retailers to demonstrate retailer values
- Walmart's Great Value focuses on competitive pricing
- Great Value has an extensive product range
- Amazon Basics offers quality, affordability, and accessibility
- Visibility, combined with positive customer reviews, bolsters success
- Sprouts Farmers Market caters to health-conscious shoppers
- Uses organic, non-GMO, high-quality ingredients for store brand
- Southeastern Grocers launches Know & Love clean label store brand
- Walgreens expands Nice For You! line of BFY products
- Dollar General uses private label to highlight Food First initiative
- Target focuses on sustainable packaging for private label brands
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Appendix
- Market definition
- Consumer research questions
- Consumer research methodology
- Generations
- Abbreviations and terms
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