Faced with ballooning grocery bills, many Americans have switched from national to private-label brands

Americans are still trying to find ways to combat
grocery store sticker shock. (Adobe Stock photo)

As Americans continue to battle their ever-increasing grocery store bills, some are cutting brand-name products and picking up lower-priced store brands, which are surging in popularity. "U.S. consumers are trying many tactics to cut their food spending: eating out less, buying less groceries and ditching name brands," report Jesse Newman and Stephanie Stamm of The Wall Street Journal. "That is boosting lower-cost store brands, which last year claimed 22 cents out of every dollar spent in grocery stores — the largest share ever for so-called private-label products."

While national brands still dominate the U.S. sales market, store brands made by companies such as TreeHouse Foods for Walmart and Kroger "are gaining ground, raising pressure on big food companies that have pushed their prices higher," Newman and Stamm write. "Sixty-five percent of shoppers say they choose private label over national brands because of store brands’ lower price, according to a Food Industry Association survey."

Over time, store brands have improved in quality, with some retailers expanding brand offerings. "Walmart, which owns the Great Value brand, is introducing a line of premium food called Bettergoods this year, with many items priced below $5," the Journal reports. "In many cases, retailers’ goal now isn’t just to emulate national brands, but to beat them, analysts said."

As inflation continues to reduce U.S. consumer spending power, the industry is leaning on store brands to increase sales. "More than half of retailers expect private-label goods to be their top driver of growth this year, according to a survey by NielsenIQ. Grocers that primarily offer store brands, such as Trader Joe’s and Aldi, are seeing more foot traffic in recent months," Newman and Stamm write. "Consumers’ views on private labels are improving, with millennials and Gen Z leading the pack, according to NIQ."