Private Labels Prove Popular With Consumers

More retailers are stocking their own store brands in lieu of name-brand products.

July 31, 2019

DECATUR, Ga.—More retailers are embracing store brands for everything from chips to cheese to wine—and consumers are snapping up the private-label products over name brands, the Wall Street Journal reports. Some merchants say promoting house brands connects with younger shoppers, who don’t have loyalty or interest in name brands. These house brands give retailers better margins, too.

For example, since 2005, Kroger has increased the number of private-label products nearly twofold. Walmart has been improving its store-brand quality, while Albertsons launched more than a thousand new private-label items last year.

Food manufacturers have taken notice and are scrambling to keep up. This year, Kraft Heinz had to slash cheese prices, and J.M. Smucker did the same on Jif peanut butter to remain competitive with private-label brands, while Conagra Brands had a weak quarter after raising prices for Hunt’s canned tomatoes. “What we did not anticipate is that private label would stay flat and, in some instances, actually decrease price,” said Conagra Chief Executive Sean Connolly.

“Private label of the past was to copy the national brands,” said Juan De Paoli, senior vice president of private brands at Ahold Delhaize USA. But these days, retailers aren’t trying to merely copy brands—they’re branching out with their own products.

Convenience stores have followed suit, with 7-Eleven, Rutter’s and Wawa among the retailers with their own private-label products.