Dive Brief:

• More than half (55%) of grocery shoppers have bought more private brand goods over the past year, compared to 28% who did so with name brands, according to FMI — The Food Industry Association’s latest Power of Private Brands report. 
• While roughly a quarter of shoppers said they cut back on buying name brands, only 5% said they did so for private brands.
• Private brands are poised to keep their momentum: Nearly half (46%) of surveyed shoppers said they plan to buy somewhat or much more private brands over the next year or so, compared to 27% who said the same for name brands, the report noted. 

Dive Insight:

Private brands are continuing to provide grocers with stellar sales results and ongoing opportunities to lock in customer loyalty, FMI’s report findings show.

One of the key takeaways from the report is FMI’s assessment that shopper loyalty to private brands is no longer linked solely to price. 

“Shoppers are planning to continue purchasing these brands even if grocery prices fall — a finding that is even stronger compared to last year,” the report noted. 

More than half (53%) of consumers said private brands are very or extremely important in determining where to shop — a sentiment that’s steadily increased in recent years, up 18 percentage points from 2016 and up 7 percentage points from 2019, FMI said. 

For some categories, consumers say they only purchase store brand products. A quarter of the shoppers FMI surveyed said they only buy private brand fresh bakery or dairy items, while 20% said the same for non-prescription drugs and fresh prepared items like meals, salads or sandwiches. FMI noted that fresh foods account for half of the top six categories where customers say they only buy store brands.

Center store aisles are also playing a key role in private brand sales. The top categories in which surveyed consumers said they plan to buy more private brand items include paper products, dairy, frozen foods, packaged breads, salty snacks and condiments.

As in 2023, cost and value were the top reasons shoppers cited in 2024 for buying more private brands, followed by quality and taste. Consumer perception of private brands offering lower prices and better value has improved, with the former seeing a 3 percentage point increase and the latter seeing a 5 percentage point increase this year from 2023. 

Even with their ongoing growth, private brands also have room to improve. Name brands have an edge when it comes to providing products consumers trust, novelty or variety, higher quality and information about a product’s origin, the report found. Surveyed consumers also told FMI they think private brands can do better in offering discounts. 

Stepping up private brand investments can help grocers compete against mass retailers. The two channels have similar unit and dollar shares of private brand spending for the year ended March 24, according to cited Circana data. 

The FMI report is based on a survey of 1,539 U.S. grocery shoppers that was conducted between March 7 and March 15 as well as data from Circana.