The finding: Private labels are gaining momentum, even as grocery inflation slows to a crawl.

• Nearly 6 in 10 (58%) of consumers are buying more private label products than they were a year ago, per an Ipsos consumer survey.
• That reflects consumers’ increasingly positive perceptions of those products: 8 in 10 (80%) consider private labels “just as good, or better than” name brands.

How we got here:

• It started with inflation. Rising grocery prices, which peaked at 11.4% YoY in 2022, made cost-conscious consumers trade down to private labels to save money.
• Those sales drove retailers to invest in private labels. More than 90% of industry survey respondents plan to increase private brand investments in the next two years, per the FMI—The Food Industry Association.
• Now shoppers’ reasons for buying private labels extend far beyond price. Even as grocery price inflation eases, consumers continue buying store brands. When asked what’s driving the trend, roughly two-thirds of shoppers mentioned factors like quality, taste, and store brands’ ability to meet specific dietary needs, per an FMI consumer survey.
• Private labels differentiate retailers’ offerings. Over half (53%) of shoppers said a merchant’s store brands are important factors for determining where they shop, up from 46% in 2019 and 35% in 2016.

Our take: One need look no further than cult favorites Costco and Trader Joe’s to see how unique, high-quality private label offerings can help build long-term loyalty with consumers.

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