Private brands’ power continues to capture wallet spend amidst inflation

With consumers continuing to try to ease wallet spend amidst inflation,private brands are on the rise—exceeding $217 billion in sales in the U.S., according to market research firm Circana.

In its CPG Private Brands Update report, published this month, Circana has revealed that in 2023, private-brand dollar sales increased 6% and unit sales increased 0.9%. Private-label sales were higher across food and beverage (6.7%) compared to nonedible (5.1%).

Households with children, and millennial and Gen X households with no children, each represented one-third of private-brand food and beverage unit purchases, the report finds.

“Private brands are increasingly capturing market share from name brands, experiencing growth in both dollar sales and units,” said Mary Ellen Lynch, principal of center store solutions at Circana.  This trend is driven by consumers, who are “strategically employing a variety of methods to stretch their dollars amid high inflation,” Lynch said.

With unpredictable environmental shifts and changes for consumers, private brands gained share from name brands, increasing to 25.5% of total unit sales, up from 24.7% in 2022, according to Circana.

Within food and beverage, private brands outperformed name brands, based on dollars and units for the core pantry. Core private brand pantry, which accounts for 52% dollar share and 45% unit share, according to Circana.

With continued inflationary headwinds, consumers are having to fork out more in grocery spending, which is driving consumers to recognize the value of private brands even in the salty snack aisle where name brands dominate. Private brands of tortilla/tostada chips and pretzels had a 2.2-point change in 2023 versus the year before, while potato chips had a 2.0-point change, according to Circana.

As consumers shift their buying preferences, the report said supporting shoppers by investing in innovation and promotions is key for retailers.

“The race is on for store brands to expand shopper trial to build trust with store brands and deepen engagement,” said Circana.

This story was originally featured on CSP Daily News, a sister publication of Supermarket News.