Study Reveals How Shoppers Really Feel About Store Brands

Store brands haven't always carried the most popular items on the grocery shelf. Per a Journal of Marketing article published on JSTOR, customers typically perceive "private label" items as inferior to their "national brand" counterparts — even when the store brand items are made with ingredients of equal or higher quality. Oftentimes, this is simply because customers take note of a store brand's "inexpensive-looking packaging and the absence of an attractive brand image," and they decide the product must not be as good as the branded version.

But with inflation running at 8.6%, which is a high not seen in 40 years, per The Guardian, the Food Industry Association (FMI) says the post-pandemic era has been marked by a higher demand for private brands (via Winsight Grocery Business). FMI's VP of industry relations, Doug Baker, said: "When it comes to taste and quality, shoppers clearly see private brands as a good option, on par with national brands," marking a clear departure from those Journal of Marketing findings of 1994. 

FMI's 2022 "Power of Private Brands" report shows that customers aren't just choosing private brands for their lower price or as a substitute for out-of-stock national brands, Baker said (via Winsight Grocery Business). The report found that while 55% of shoppers have opted for store brands because they're cheaper, 42% say they like the way these items taste, 24% said they "meet their meal solution needs," and 23% appreciate their "appealing" ingredients. Other findings show that customers choose private label items for their quality, sustainability, and uniqueness, a far cry from the idea that these are a last-resort choice for budget-conscious shoppers.

None of this comes as any surprise to economist Jack Kleinhenz of the National Retail Federation, who told the Financial Times that "when disposable income becomes tighter, consumers find ways to stretch their budgets." But the tendency to switch from national brands to store brands has not been seen across all demographics, because higher-income shoppers are not as likely to "trade down" or substitute items like their lower- and middle-income counterparts are. This phenomenon is not only seen in food shopping, but in the overall retail sector, too. Nevertheless, thanks to the investment made by budget stores like Aldi and Dollar General to develop a robust range of in-house brands, experts say these stores are expected to come out on top as shoppers make different purchasing decisions.