News that inflation remained steady in July was a relief for consumers. Already reeling from the high price of groceries, consumers have started looking for ways to reduce their grocery bill. In February, journalist Francisco Velasquez reported, “According to a LendingTree survey of over 2,000 Americans, which the loan marketplace conducted in early January, a majority — 88% — have altered their shopping habits to afford groceries.”[1] One of the ways that consumers are trying to lower their grocery bills is by purchasing private label goods. Velasquez noted, “44% of respondents said they’re opting for more generic brands. ... These shifts could benefit retailers such as Aldi, Costco, and Walmart, which offer a variety of in-house brands, also known as ‘private labels.’ Last year, Walmart led retailers in generating the largest portion of sales from its generic brands, followed closely by Target.”

The Rise of Private Labels

Historically, name brand products have held a competitive edge over private label products thanks to name recognition and higher quality. That’s changing. The Supermarket News (SN) staff reports, “Initially driven by cost-conscious shoppers, private labels have evolved into sought-after options as consumers increasingly recognize the quality and variety retailers offer.”[2] The SN staff cites the results from two studies released earlier this year by Circana:

“The global findings reveal that private labels are becoming increasingly competitive in the CPG market, with retailers building brand equity through investments in innovation, sustainability, differentiation, and premiumization. These actions have pushed private labels beyond a focus on price. Private labels are well-established in the European Union, holding 39% value share and 47% unit share with strong growth continuing in Spain and France. Relative to other global markets, U.S. private label share is emerging (22% value, 24% unit share), but is the fastest-growing in dollar sales.”

The competition for consumer loyalty remains fierce. In April, NielsenIQ reported, “53 per cent of consumers [are] increasingly purchasing more private label products. Simultaneously, the top 10 global brands also experienced a resurgence in global sales momentum in 2024, suggesting that retailers and consumer packaged goods (CPG) manufacturers will continue to compete for consumer attention on the shelves of large and small grocery stores and retailers alike.”[3] There is no denying, however, that private labels are on the rise. Journalist Donna Eastlake observes, “Once considered the poor relation of glossy food and beverage brands, private label has undergone a huge transformation, and is reaping the reward.”[4]

Helping Name Brands Stay Competitive

If you don’t believe the competition for consumer attention is heating up, Greg Petro, founder and CEO of First Insight, Inc., has news for you. He explains, “The store brand juggernaut triggered by pandemic-era inflation and economic uncertainty has passed a tipping point with consumers and may have claimed its first national brand victim.”[5] That victim, he states, is Del Monte, which recently declared bankruptcy. He adds, “Retailers have gotten smart; consumers have gotten wise.” Petro reports that a survey by Ernst & Young found, “more than 40% of respondents believe ‘product innovations’ by national brands are ‘merely disguised cost-reduction measures,’ such as shrinking package sizes.” He concludes, “Put it all together and it becomes clear that traditional brand awareness is becoming murky, brand loyalty is fading, and brand equity is shrinking.”

Nevertheless, Marta Cyhan-Bowles, Chief Communications Officer and Head of Global Marketing at NielsenIQ, asserts that her company’s report “underscores the importance of collaboration between manufacturers and retailers to drive the next wave of CPG growth and effectively engage with consumers’ shifting preferences.”[6] Although it might be counterintuitive that retailers are willing to push name brands over their private labels, food journalist Deniz Ataman explains, “Despite the uptick in private label sales, retailers rely on name brands to generate sales through their retail media channels.”[7] She adds, “The boost in store brands is attributed to a few critical advantages retailers have over name brands: better margins, lower prices, direct relationships with manufacturers, and ecommerce. While some brand loyalty exists, it is declining, especially among younger consumers.”

Alison Cayne, founder and CEO of Haven’s Kitchen, believes that name brands can successfully compete against private labels in this retail environment. She suggests that brands need to understand their consumer and deliver products that match their needs. She asserts brands need to ask, “What is your unique selling value to your consumer, and are you positioned and priced well for that consumer?”[8] Artificial intelligence solutions can help brands compete better. For example, the Enterra Consumer Insights Intelligence System™ can help brands better understand their customers and the Enterra Revenue Growth Intelligence System™ can optimize pricing, promotion, media, and assortment strategies to maximize commercial performance and revenue growth.

Concluding Thoughts

If name brands want hold or increase market share, they must be cost conscious. Petro explains, “National brands — those household names that have dominated grocery shelves for so long — face a daunting challenge, especially when the price spread is as large as it is on many items. How much longer can a box of famous-name cereal retail for $4 when the identical product and package size of store brand is $3?” And name brands also need to increase their appeal to younger shoppers. Eastlake concludes, “The growing global population means that consumer demand is rising, not falling. In other words, there’s space for everyone. Brands just need to learn to compete in the space they once occupied almost entirely alone.”

Footnotes

[1] Francisco Velasquez, “Generic brand groceries are winning big as inflation makes a comeback,” Quartz, 27 February 2025.

[2] Staff, “Private label becoming increasingly competitive in the CPG market,” Supermarket News, 27 February 2025.

[3] Staff, “Consumers buying more private label products than branded, report reveals,” Sinar Daily, 6 April 2025.

[4] Donna Eastlake, “Private label beats brands in battle for supremacy,” Food Navigator Europe, 25 June 2025.

[5] Greg Petro, “Del Monte Bankruptcy A Harbinger As Consumers Flock To Store Brands,” Forbes, 14 July 2025.

[6] Sinar Daily, op. cit.

[7] Deniz Ataman, “In a sea of similar products, what’s the difference between private label and name brand?” Food Navigator USA, 2 July 2025.

[8] Ibid.