Grocery Shoppers Embrace Store Brands as Inflation Persists

As US consumers continue to seek value in the grocery aisles, private label brands have reached unprecedented market share, according to the latest data from the Private Label Manufacturers Association (PLMA). The surge in store brand sales reflects the growing appeal of these products among cost-conscious shoppers navigating the challenges of elevated grocery prices.

Unlocking the Power of Private Label: How Store Brands are Winning the Retail Battle

Record-Breaking Market Share for Private Brands

Private brand dollar sales, including food and nonfood items, reached 1 billion across retail channels for the first half of 2024, up 2.3% year-over-year. This growth outpaced the 1.1% increase in national brand sales, which totaled 2 billion during the same period. The PLMA noted that the sales figures for private label reflect the "strength of store brands' superior performance at checkout versus national brands," with unit volume growth of 2.5% compared to a 0.8% decline for national brands.As a result, private brands have achieved a market share of 22.9% in units and 20.4% in dollars as of June 16, 2024. At the current growth rate, the PLMA expects overall store-brand revenue for the full year 2024 to exceed 0 billion, setting a new annual sales record for private label.

Driving Growth Across Categories

The surge in private label sales is not limited to a few product categories; it is a widespread phenomenon across the retail landscape. According to the PLMA, nine out of the 10 product departments tracked by Circana reported dollar sales growth for private label brands in the 52 weeks ended June 16, 2024.Among the edible segments, liquor led the way with an 8.8% increase in dollar sales, followed by general food (up 6.9%), beverages (up 4.3%), frozen food (up 2.9%), and refrigerated food (up 0.7%). In the nonfood categories, beauty care topped the list with a 10% dollar sales growth, outpacing other segments like home care (up 6.8%), pet care (up 5.8%), general merchandise (up 2.2%), and home (up 1.7%).

Baking Boom and Pantry Staples Shine

The private label surge extends beyond the traditional grocery aisles, with baking-related items and pantry staples also experiencing significant growth. In the baked goods and baking items category, private label saw strong dollar sales increases in fresh bread and rolls (up 7.2%), bakery snacks (up 11.8%), flour/baking meal (up 11.6%), baking needs (up 7.5%), baking mixes (up 5.3%), cookies (up 5.2%), crackers (up 11.1%), and more.The trend extends to the cold departments, where baking-related items like refrigerated baked goods (up 12.5%), refrigerated pizza (up 1.3%), refrigerated dough (up 12.6%), frozen bread/dough (up 10%), and frozen breakfast food (up 10.7%) all experienced robust growth.Beyond baking, private label also gained ground in other food categories, including cold cereal (up 14.3%), hot cereal (up 1.2%), salty snacks (up 15%), pasta (up 9.5%), rice (up 14.8%), and snack bars/granola bars/clusters (up 14.7%).

Inflation-Weary Shoppers Embrace Store Brands

The surge in private label sales can be attributed to the ongoing inflationary pressures that have left many US consumers more price-conscious than ever. According to a recent consumer survey by Circana, more than 8 in 10 shoppers are now willing to purchase a product if the current price is a good deal compared to typical pricing.This shift in consumer behavior has benefited private label offerings, as shoppers seek out value-driven alternatives to national brands. Circana's CPG Private Brands Update report for 2023 showed private label dollar sales up 6% and unit sales up 0.9% year-over-year, with food and beverage (up 6.7%) outpacing nonfood (up 5.1%) in growth.The research firm also noted that private brands have gained market share, rising to 25.5% of total unit sales in 2023 from 24.7% in 2022, with notable gains in categories like general food, shelf-stable beverages, and refrigerated foods. Retailers have further contributed to private brand growth through digital marketing and customer product trials, helping to deepen consumer trust in store-branded offerings.As the economic landscape remains uncertain, the continued appeal of private label brands suggests that cost-conscious consumers are increasingly willing to forgo national brands in favor of more affordable, yet high-quality, store-branded alternatives.