Meijer and Aldi tied for second place in a recent consumer survey, while Amazon ranked last.
Once seen as just a value option by shoppers, private label offerings have evolved with the growth of new generational shoppers, quality control and premium products, according to research by consulting firm Magid.
“That’s why you see players like Publix and Trader Joe’s and Costco’s Kirkland continue to push their private label brand as not just a substitute of a national brand but as a leader in a lot of ways,” Matt Sargent, senior vice president of retail at the firm, told Food Dive.
But as Magid‘s latest report shows, not all store brands are equal in the eyes of consumers. And while most retailers have seen the sales benefit of increasing their private label offerings, some stand to benefit more than others in the months and years ahead.
In a survey of 3,000 U.S. adults conducted in May, the firm found that Trader Joe’s led all retailers in store brand interest, with 56% of respondents saying they would be open to purchasing private label products from the grocer. Meijer and Aldi tied for second place with 55% expressing interest while Kroger, Publix and Costco all placed third at 53%.
Among mass merchandisers, 51% of Walmart and Sam’s Club consumers saying they would consider buying private labels, while 46% of respondents expressed interest in Target’s store brand grocery products.
Amazon ranked last in the grocery category, with 37% of consumers open to trying their private label grocery products, which include Amazon Elements, Presto, Whole Foods 365, Wickedly Prime, Mama Bear, and Happy Belly.
Consumers showed a greater preference for specific store brands. Still, some lines came out well ahead of others. Costco’s Kirkland brand scored highest in Magid‘s survey, with 94% awareness and 74% of shoppers saying they would consider the line. Target’s Market Pantry brand, on the other hand, saw 79% awareness, but only 59% of people would consider buying it.
Walmart’s brands, meanwhile, were a mixed bag. The retailer’s Sam’s Club brand had 90% awareness but only 54% were likely to consider, while its Great Value line saw 93% awareness and 70% of consumers likely to consider purchasing.
Consumers prefer private label specialists
Across the board, Sargent said the one thing that is clear through the data is that consumers react strongly to private labels from grocers that have an established strength in that category. This is the case with Trader Joe’s and Aldi, which carry predominantly store brands. But it’s also true for grocers like Publix, he said, that have demonstrated a longstanding commitment to private label.
“Publix is a good example because they are a retailer that’s done very well in grocery and they’ve been able to parlay that strength of grocery into private labels,” said Sargent.
The Florida-based grocer known for its customer service carries three store brands: Publix, Publix Premium and Greenwise. The company is working on expanding its standalone GreenWise stores selling products exclusively from its natural and organic line with the same name.
“Players like Publix and Trader Joe’s and Costco’s Kirkland continue to push their private label brand as not just a substitute of a national brand but as a leader in a lot of ways.” – Matt Sargent, senior vice president of retail, Magid
Regional grocers like Publix and Meijer are often better able to customize their private label options to local consumers than national brands or other, larger grocers, Sargent noted.
“It’s almost a mentality that smaller is better, local is better, and if retailers can capture that, they can find huge benefits,” said Sargent.
Read the original post on Grocery Dive.