Remember the old hidden-camera TV commercials where a fancy restaurant’s fresh-brewed coffee was replaced by instant coffee crystals, and none of the patrons seemed to notice?
Apparently something very similar is happening in grocery stores across the country, as shoppers have replaced their favorite name-brand products with store brands – and more than a quarter of them haven’t noticed at all.
That’s one of the findings in a new report from Numerator. Its “Private Label Perceptions” report found that store brands have become so commonplace and so accepted, that many shoppers don’t even realize they’re buying them.
Most shoppers recognize Member’s Mark as being a Sam’s Club brand. Kirkland Signature is Costco’s house brand. And Target’s best-known private labels are up & up and Cat & Jack. Shoppers who buy these brands know just what they’re getting.
But do you recognize the brand Spring Valley? Expert Gardener? Or Better Homes & Gardens? They’re all store brands – but whose? Most shoppers have no idea. They’re each among the least-recognized private label brands, known by less than 25% of shoppers.
The answer, incidentally, is that they’re all Walmart brands. And more than three out of four shoppers who buy them don’t even realize that.
In all, Numerator found that 99.9% of shoppers – pretty much everyone – has purchased at least one private label product over the past year. But 27% of those shoppers occasionally buy store brands without knowing they’re store brands at all.
That’s likely because store brands’ quality and packaging have improved to the point that they’re legitimate competitors to many national brands. But Numerator says there are things retailers can do to gain even more acceptance for their own brands.
When asked what they like about private label products, 65% of shoppers in Numerator’s survey said they’re “budget-friendly.” And Numerator’s data shows they’re right – the price gap between national brands and their store-brand equivalents has grown by 38% since 2019, with shoppers now paying an average of $2.20 more for a name brand.
And when asked what they’d like to see more of in their stores’ private label offerings, it turns out shoppers want even more savings. The top improvement that shoppers would like to see is more and better promotions, followed by more variety and lower prices.
So it seems the key to improving store brand sales may be to “trick” more people into buying them, by not letting on that they’re store brands at all.
Numerator doesn’t quite come out and say this, of course. But to most shoppers, lower prices are store brands’ main selling point. Other words and phrases that shoppers associate with store brands are “reliable” and “generic or basic.” But only 18% call them “high-quality,” and only 6% associate store brands with the words “trendy or modern.”
Some shoppers know just what they’re buying when they pick out store brands, and many actually prefer them. But price is still the deciding factor for most. So “retailers should continue positioning private label as a smart value choice,” Numerator advises. “National brands face mounting pressure to justify higher prices, particularly in the face of tariffs and rising costs. Retailers, on the other hand, have an opportunity to lean into private label’s value advantage without compromising quality.”
Overall, nearly 20% of all grocery dollars are spent on private label products. But that’s just in this country. In the UK, private labels account for nearly 56% of all grocery spending.
So there’s a lot more room for American store brands to grow. That’s good news for retailers, troubling news for national brand manufacturers – and great news for shoppers, who stand to benefit from the increased competition for their attention and grocery dollars. That’s even if they don’t realize whose products they’re actually buying.
Image source: Sam’s Club
