The image of private label products has improved markedly in recent years, as many retailers have diligently worked to ensure that their store brands can compete with name brands not just on price, but also on quality. This briefing looks at the growing importance of private label through the lens of eight specific retailers, all of which have all made their store brands a central pillar of their corporate identities.
In times of financial hardship, consumers often turn to private label goods in order to cut back on spending, a behaviour observed during the economic downturn of 2008-2009. Though the contours of consumer behaviour during the COVID-19 pandemic have been somewhat different, private label sales have again posted substantial gains.
Although private label goods have historically competed primarily on price, the quality of these products is now comparable with name brand analogues in many cases. As a result, a significant share of consumers now purchasing store brands for the first time will continue to use these private label goods.
Private label goods have traditionally been most visible in home essentials product categories. In recent years, however, many retailers have successfully expanded their private label portfolios into apparel, consumer electronics and other new categories.
A growing share of the world’s population is mindful of the impact that their consumption behaviour has on the environment and society. Retailers are successfully utilising sustainability and ethical labels on their private label offerings to signify to this consumer segment that they share these values.
The use of sustainability and ethical labels is especially visible in the efforts of retailers to add more organic, non-GMO, plant-based and other specialised packaged food products to their private label assortments, as sales of these products are growing rapidly due to the rise of healthy eating and alternative diets.
Due to COVID-induced lockdowns and social distancing, consumers around the globe are now eating more at home. Sales of private label goods designed to support home dining have skyrocketed, as retailers have rushed to embrace this trend. As the pandemic fades, however, this trend is likely to dissipate gradually.
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