More shoppers prefer to buy store brands over national labels

The trend: The gap between national brands and private labels is fading fast. Nearly half (47%) of US shoppers prefer to buy store brands, compared with 37% who prefer national brands, per a report by Kroger’s consumer insights platform, 84.51°.

• Of the 37% who opt for national brands, over two-thirds are open to purchasing private labels.

Digging deeper: Shoppers are most likely to switch to private labels for frozen, shelf-stable, household cleaning, and over-the-counter healthcare products.

• They’re least willing to buy private label pet products, personal care and beauty items, and beverages.
• Consumers cited quality as their primary consideration for deciding whether or not to make the switch, while store label variety and selection also play a role in their purchasing decisions.

The big takeaway: Consumers’ newfound affinity for private labels should be deeply worrying for consumer packaged goods (CPG) companies like Unilever and Nestlé, which are using price hikes to paper over falling unit sales.

• CPGs that continue to raise prices run a serious risk of losing loyalty and market share as financial pressures drive consumers to look for deals in the grocery aisle, and the quality (and perception) gap between national and store brands narrows.