Private-label brands, a.k.a. store brands, have evolved from simply being low-cost, name-brand alternatives to becoming innovative, sustainable, and differentiated products. Helped by factors like inflation and waning brand loyalty, private label is making a significant impact across many consumer product categories. It’s not just about bargains, consumers are drawn to it for their quality, high standards, innovative ingredients, and new concepts.
The Appeal of Private Label
With a focus on enhanced branding, eye-catching packaging, and exciting flavors, retailers are clearly investing heavily in their store brands. Today, buying private label items is about more than just saving money, it’s about the personal satisfaction of making a smart choice.
Sophisticated retailers are using private brands to differentiate themselves in the market and build customer loyalty, not only to improve margins and penny profit. The growing popularity of private label products highlights a shift in consumer behavior. As consumers are more informed about the products they choose, they are increasingly prioritizing value, quality, and sustainability in their purchasing decisions. While this trend is partly driven by rising living costs, it is also influenced by a greater awareness of sustainability and personal values; winning retailers are keenly incorporating these attributes in their store brands.
The Significance of Gen Z
More than half of Gen Z grocery shoppers “always/frequently” choose a place to shop due to its store brands, according to a Private Label Manufacturer’s Association consumer research report, called Gen Z Loves Store Brands: America’s Youngest Consumers Speak Out on Grocery Shopping, Stores and Brands.” In the survey, 67% of Gen Z say they are “extremely/very” aware of store brands; 64% say they buy store brands “always/frequently;” 56% are “extremely likely/likely” to experiment with store brands to find “best value;” and 51% say they “always/frequently” choose a place to shop due to its store brands. 2
The Value Equation for Retailers & Rising Share of Sales
Control: complete control over their production, branding, and distribution.
Loyalty: store brands build trust over time by focusing on consistent quality and delivering value that keeps customers coming back.
Exclusivity: Private label offer products unique to the retailer. National brand items are widely available across multiple retailers, so they lack what may be the distinct draw a store brand provides.
Reputation: While national brands typically are recognized for higher quality, store brands are closing that gap by following many premium product attributes of national brands.
Pricing & Profit: Control over manufacturing, distribution and marketing not only results in pricing power but typically significantly higher profit margins.
By the Numbers
Store brands are no longer offered as a single tier offering. Many retailers now offer a tiered assortment strategy, value, mid-tier and premium lines alongside national brands. All these trends together have been the momentum behind year-over-year share growth. Total dollar share now exceeds 22% with unit share approaching 27%. This equates to $211.4B in annual dollar sales, +5.3% growth and 56.1B in unit sales, +2.1% growth. This compares to $747.1B for national brands, +1.8% growth and 155.2B national brand unit sales, +0.4% growth. Store brands continue to hold a dominant share in refrigerated products for both dollars and units. However, if measured in absolute dollars and units, grocery products make up the largest share of store brand dollars and units.
Source: SPINS Natural Channel, SPINS Conventional Channel (powered by Circana) data 52 Weeks Ending 4/20/2025
Store brands have delivered a +4.8% 3-year dollar sales CAGR compared to +2.0% for national brands. Across all tracked departments, year over year, the percentage change for store brands exceeded that of national brands. A curious development can be found in alcohol. As more consumers seek non-alcohol beverage alternatives, it is noteworthy the investment store brands have made in alcohol.
Store brands have realized year over year unit growth in eight of ten departments. Conversely, national brands have posted unit growth in only three of ten departments.
An Evolving Model of Coexistence
Despite the continued rise of private label, national brands still hold a powerful place in the hearts—and carts—of U.S. consumers. In fact, 62% of shoppers say they still default to the branded products they know and trust. As private label gains ground, retailers need to maintain a careful balance. The objective should be an assortment strategy that delivers value, variety, and innovation without minimizing the national brands shoppers still seek.3
To remain essential in an era of private label expansion, national brands must double down on their key strengths: storytelling, emotional connection, and innovation. What’s emerging shouldn’t be a battle for shelf dominance but an evolving model of coexistence, where value, trust, and product innovation work together to meet changing consumer needs.
Sources:
https://www.mckinsey.com/industries/retail/our-insights/a-turning-point-for-private-brands-how-retailers-can-seize-the-opportunity 1
https://www.supermarketnews.com/consumer-trends/gen-z-loves-private-label-report 2
https://nielseniq.com/global/en/insights/analysis/2025/private-label-branded-shelfscape/ 3
Additional Resources:
https://www.newhope.com/retailers/the-private-label-boom-why-grocers-are-betting-on-their-own-brands
https://www.mintel.com/insights/retail/private-label-booms-reshaping-the-us-retail-landscape/
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Looking for more information? Please contact the SPINS Account Manager for PRESENCE, Jeff LaVere at jlavere@spins.com.
(847) 277-9500