The store brands boom: 5 trends to watch now

Store brands are booming — at times even outperforming national brands. Also known as private label brands, private brands, house brands or “own brands,” store brands — products sold under the name of the retailer selling them or a secondary brand owned/controlled by the retailer — saw 4.7% growth in the U.S. in 2023, with annual sales coming in at a record $236.3 billion, according to the Private Label Manufacturers Association’s (PLMA) 2024 Private Label Report.

Here, five trends to watch in the store brand space:

Retailers have long positioned store brands as a money-saving option. But these days, store brands are increasingly being marketed as highly desirable — even upscale — offerings that can be competitive with widely known national brands.

In April, for instance, Walmart made headlines by announcing the launch of a grocery store brand called Bettergoods (styled as bettergoods) that includes more than 300 items including frozen, dairy, snacks, beverages, pasta, soups, coffee and chocolate. CBS News called it “an upscale store brand,” and Fast Company deemed it “a premium grocery label, with fancy packaging to match.”

In its statement about the launch, the retail giant said that Bettergoods is about “quality, trend-forward and chef-inspired food.” Of course, Walmart being Walmart, it’s also emphasizing that Bettergoods is a good deal — all price points fall under $15, “with most products available for under $5” — but that value proposition is about “making elevated culinary experiences accessible for all,” in the retailer’s words.

And the products are certainly marketed with the “culinary experience” in mind. Case in point: Bettergoods Pistachio Nut Butter, which the label notes is made in Italy and “crafted artisanally.” Or Bettergoods Mango Chile Salsa, which is “made from a family recipe.”

With more than 4,600 stores in the U.S., Walmart is certainly in a position to help transform perceptions — but the upscaling of store brands is also happening among smaller players. Take SpartanNash, which operates 144 grocery stores (under banners including Family Fare and D&W Fresh Market) in nine states in addition to serving as a distributor for grocers across the country. Earlier this year, SpartanNash launched Finest Reserve, part of its Our Family private label, with offerings including frozen pizza, pasta, sauces, dressings, spices and chocolates — all of which are being positioned as premium products, as Progressive Grocer’s Greg Sleter reports.

“Not that long ago,” says Ashley Wacht, Head of CPG Product Marketing at Quad, “many consumers saw store brands as a cheaper alternative to desirable name brands. But today’s retailers are leveling up their private label products in ways that help consumers see them as a potential ‘first choice’ rather than a cost-saving compromise.”

“Fifty-four percent of surveyed shoppers said they plan to purchase much or somewhat more store brands in the future, compared to 26% who said the same for name brands,” Marketing Dive’s Catherine Douglas Moran reports, citing a fall 2023 report from FMI — The Food Industry Association. Though price sensitivity remains a big factor among a critical mass (61%) of these shoppers, taste (51%) and quality (47%) are also big drivers. Remarkably, “90% of shoppers said they would be somewhat or very likely to continue buying private brands even if inflation becomes less of a factor,” Moran notes.

Playing up convenience is another way that retailers are creating store brand converts. For instance, in March, Kroger debuted new seafood meal solutions across its Private Selection, Kroger and Home Chef brands, which “can be prepared in as little as seven minutes in the oven, microwave or air fryer, depending on preferences,” Trend Hunter’s Michael Hemsworth reports. Store brand products such as these are “redefining the ready-to-eat market with premium private label offerings,” he notes.

“Retailers are on the front lines of understanding consumer needs — and they have the advantage of seeing firsthand how shoppers respond to merchandising, signage and store displays,” says Wacht. “The key is to unlock and leverage that intel to create in-store solutions that can move the needle for their own brands.”

(As part of our suite of solutions for marketers, Quad deploys large- and small-format offset, plus state-of-the-art digital presses, to serve more than 20,000 retail locations nationwide with custom in-store materials. Learn more here.)

In the past, store brands were built on brand intellectual property (IP) that was entirely owned by a particular retailer. Increasingly, though, retailers are engaging in partnerships with designers, celebrities, athletes, existing brands, social media influencers and even popular TV series to help gain immediate traction with consumers. These partnerships are often positioned as creative “collaborations,” but they’re functionally equivalent to traditional store brand offerings in that the product lines are typically available exclusively through only one retailer.

JCPenney, for instance, has partnered with celebrity stylist Jason Bolden to reimagine collections for two of its store brands: J. Ferrar and Worthington. The retailer is positioning the collab as “JCPenney x Jason Bolden — exclusively at JCPenney!” with the co-branding extending to the product lines, which are called the J. Ferrar x Jason Bolden and Worthington x Jason Bolden collections.

JCPenney also collaborated with Warner Bros. on a limited-edition clothing collection, inspired by ABC’s hit mockumentary series “Abbott Elementary,” in time for the 2023-2024 school season.

Earlier this year, Dillard’s partnered with fitness expert Katherine Mason to launch an assortment of athleisure apparel under its Kinesis private label. The retailer also teamed up with “The Bachelor” contestant Caelynn Bell to help design spring and summer pieces for its Gianni Bini line.

“In many ways, collaborations like these are essentially influencer marketing campaigns that embed a given influencer in the creative process rather than just hiring them on at the end,” says Gwen Maass, Senior VP, Media at Rise, a Quad agency. “But the goal is the same: to leverage the influencer’s fame and fandom — and especially their social media following.”

When it comes to consumer preferences, change is constant, which can make reacting to shifts in demand challenging. This is where store brands can truly shine — enabling retailers to respond swiftly and strategically to evolving habits and trends.

Consider Macy’s, which in February released a new private brand of sleepwear called State of Day that was informed by consumer insights. The “feel, fit and function” of State of Day, which features 165 pieces ranging from $8.50 to $79.50, was based on a survey of more than 25,000 women conducted by Macy’s, Retail Dive’s Nate Delesline III reports.

In addition to collecting data through surveys, stores are also leveraging data from their own loyalty programs.

“Retailers are in a unique position to understand their own customers through loyalty data,” says Howard Diamond, Chief Strategy Officer at Rise. “They understand their needs and their buying patterns, and they have a direct line of communication to engage and personalize offers to their most loyal shoppers. So, as they roll out store brands, they also have the ability to be really smart about their marketing dollars, reaching customers who have a propensity to buy those products.”

As considerations such as sustainability and wellness become increasingly important to consumers — particularly among younger generations — store brands are providing retailers an outlet to actively demonstrate these and other values. Whether it’s through packaging revamps, product reformulations or the introduction of new products, retailers are leaning into what’s important to them and their customers.

Dollar General, for instance, has been expanding its private brand Clover Valley — adding more than 100 items to the line in 2023 alone — to highlight its Food First initiative, “a broader strategy aimed at providing customers with healthier options including more food products and fresh food,” Chain Store Age’s Marianne Wilson reports. Clover Valley now encompasses roughly 600 items including everything from sauces and dips to flavored sunflower seeds and 100% whole wheat sandwich bread.

And earlier this year, Target updated packaging for its private Up & Up label to be more sustainable, “reducing plastic and moving to paper packaging where possible,” the company told Chain Store Age’s Marianne Wilson. The retailer also launched a new toy brand, called Gigglescape, with “more than 90% of the product packaging plastic-free,” per Retail Dive’s Nate Delesline III.

“Store brands can serve as powerful platforms for retailers to embody their values, including their sustainability efforts, while carving out a distinctive presence on store shelves and building consumer trust,” says Jamie McGarry, Quad’s Head of Consumer Packaged Goods Strategy.

Want to continue the conversation? Please contact Ashley Wacht to learn about how Quad can help retailers with their store brand marketing — through sustainable product design and production, in-store retail signage and displays, retail-media solutions, digital activations, print campaigns and more.