In Private Label, Walmart Towers Over Everybody Else

Private label brands are becoming an increasingly big business for grocery retailers, but Walmart leads the pack.

That’s according to data released Monday by Chicago-based market research firm Numerator that found that retail giant Walmart owns four of the top five private label brands, in terms of household penetration.

Among the top private label brands, Walmart’s Great Value items were purchased by 72.7% of U.S. consumers, followed by the Bentonville, Arkansas-based retailer’s Equate brand (51% penetration), Marketside (44.2% penetration) and Freshness Guaranteed (40% penetration). Dollar Tree’s label, with 32.5% household penetration, rounded out the top five, according to Numerator.

Amazon’s private label brands do well in consumer electronics and home goods, but the online retailer’s own grocery, household and health & beauty products only have a 3% share of the private label market.

Private label products are growing in importance as inflation-pressed consumers trade down from some of their favorite brands.

At small-format stores, private label is big business, Numerator found.

More than 77% of Aldi’s sales are for private label items, followed by Trader Joe’s at 59.4%.

Private label products make up 33.5% of Costco’s sales and 30% of those at Sam’s Club. At Walmart, those popular private brands add up to 23.3% of the retailer’s sales, Numerator said.

All of those are significantly higher than the industry average of 17.4% private label sales in grocery overall, with branded products by far more popular than their generic counterparts.

The numbers are close, but low-income consumers are not the most likely to purchase private label items. Low-income (17.1%), middle-income (17.9%) and high-income (17.2%) shoppers all have roughly the same private label grocery share, the firm found.

Household penetration of Aldi’s private label brands grew by 2.3 points from the second quarter last year to the same period in 2022, the most of any retailer. Target’s Favorite Day label penetration increased 2.2 points, with Amazon Basics up 1.7 points, according to Numerator.

“As inflation continues to rise, price is becoming more important than brand name for many consumers,” Numerator said in a statement. “In recent months, the number of consumers who say price is more important than brand name has grown across all income levels.”

Last month, shopper intelligence firm Catalina noted that certain private brand categories are growing particularly swiftly, due to inflation and supply chain hiccups.

Among them, private brand baking mix sales have soared 40% and soup sales are up 17%, Catalina said.