How Dominant Will Private Label Products Become?

Numerator.com recently released a comprehensive report detailing the latest trends in the private label sector.

Over the past year, private label products have represented 24% of unit volume across 10 major product categories. General merchandise categories, including office supplies, home and garden items, and tools and home improvement, have seen the highest share of private label products. Conversely, grocery, health and beauty, and household products have experienced the greatest household penetration for store brands. Club, office, and mass retailers lead in private label sales, whereas beauty and electronics stores report less than 10% of their unit volume from store brand products.

Among 20 of the biggest U.S. retailers, ALDI and Trader Joe’s stand out for their extensive reliance on private label goods, with store brands constituting over two-thirds of their total sales volume — 80% for ALDI and 69% for Trader Joe's. In contrast, Amazon’s private label offerings make up just 3% of its sales, marking the lowest share among major retailers.

Kroger's “Smart Way” brand, launched in late 2022, has emerged as the fastest-growing private label brand, boasting a sales increase of over 100% in the past year. Other notable performers include private label brands from Dollar Tree and Dollar General, which feature prominently among the top 15 fastest-growing private labels. Additionally, drugstore brands from Walgreens and CVS have also made significant strides. Walmart’s private label brands lead the market, with more than half of U.S. households purchasing them over the past year.

So far this month, multiple retailers have already announced new developments regarding their private label brands and products.

For example, according to Store Brands, "Walgreens has expanded its own brand assortment of beauty products with the launch of a premium skincare line the drug store chain is touting as offering premium quality products without a premium price tag."

Also, on Sept. 4, Albertsons Companies, Inc. announced details about its first major private label in recent years, named "Overjoyed," designed to enhance consumer connections through everyday moments. This new brand will focus on a variety of baked goods, including "cupcakes, candles and liners; cookies; chocolatey trail mixes; cheesecakes and sprinkles."

“At Albertsons Cos., we are dedicated to bringing people together around the joys of food, and our newest Own Brand, Overjoyed, underscores this commitment by helping shoppers celebrate the joys of every day and connect with loved ones. We are constantly evaluating how well we’re meeting our customers’ needs through our Own Brands portfolio, and we realized we had an opportunity to create a brand to celebrate life’s every day, special moments. With Overjoyed, we look forward to helping our loyal customers create an emotional connection and lasting memories from hosting a hot fudge sundae party to surprising the family with cupcakes for dessert to treating a teacher or neighbor with holiday trail mix ‘just because.’”

Brandon Brown, senior vice president of Own Brands for Albertsons, via Albertsons

Ultimately, Numerator.com's latest report highlights the growing significance of private label products, which now account for nearly a quarter of unit volume across key sectors. Other findings from the report include that 58% of shoppers believe that "private label brands offer an above-average value for their price." Additionally, 43% of consumers buy private label products with the goal of saving money, and 29% think these brands are "just as good as name brands." As the private label market continues to evolve, retailers are increasingly focusing on innovative and consumer-centric product offerings.