Big Name Brands Are Feeling the Squeeze From Grocers’ Private Label Brands – The Average Joe

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    Big Name Brands Are Feeling the Squeeze From Grocers’ Private Label Brands

    Rhea Lobo

    May 29, 2024

    What’s in a name? A lot of extra cost. Shoppers are ditching branded goods for cheaper store brands — a shift driven by years of rising food prices. This trend reflects consumers feeling the financial squeeze and changing their shopping habits.

    • National brands still dominate 78% of US food and beverage sales, but store brands are catching up, claiming 22 cents of every grocery dollar spent last year — a record for private labels.
    • Store brands are growing fast: pet food sales are up 7.5%, pasta and grains are up 7.9%, while national brands have seen a 15.2% drop in baking supplies.

    Brand(less) wars: According to a Food Industry Association survey, 65% of shoppers prefer private labels for lower prices. Facing this shift, established brands like McCormick ($MKC) and Mondelez ($MDLZ) are under pressure to defend their market share as over half of retailers expect private-label goods to drive growth this year, per an NIQ survey. This creates a brandless competition between store brands like Walmart’s ($WMT) Bettergoods and Target’s ($TGT) Good & Gather. Aldi plans to nearly double the pace of its private label footprint by 2028, suggesting that the next big brands might come courtesy of your favorite store.

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