More than half of U.S. consumers – 56 percent – would consider purchasing private label grocery products from Trader Joe’s, according to research conducted by New York-based research consultancy Magid. The findings appear in Magid’s newly released report “Consumer Attitudes Toward Private Label.”
The report discovered that shoppers were most open to buying private label grocery items from Trader Joe’s because of the specialty retailer’s established reputation within the category. Customers are more comfortable purchasing private label grocery at retailers that specialize in that area, and are more willing to try other private label categories from a retailer they trust, Magid found.
In the case of Monrovia, Calif.-based Trader Joe’s, its success in private label is a result of the perception that it provides unique, trendy products that are ahead of national brands, the report noted, adding that mere copies of national-brand products can lower consumers’ overall evaluation of a retailer, particularly among Millennials.
After Trader Joe’s, consumers expressed the most interest in private label grocery items from Meijer and Aldi, at 55 percent each, while the respective private label grocery offerings of Publix, Kroger and Costco each received top marks from 53 percent of respondents.
“Private label provides the single strongest level retailers can utilize to keep consumers engaged in an age of increased competition where differentiation matters more than ever,” said Matt Sargent, Magid’s SVP of retail. “However, it is important that retailers position themselves their private label offerings as either ‘unique’ or ‘cost savings,’ as anything that comes off as inauthentic comes off the wrong way among consumers.”
The consultancy’s research, conducted last May, additionally uncovered the following:
- Among big-box retailers, Walmart and Sam’s Club were more popular with consumers, with 51 percent open to private label grocery products from both. By contrast, 46 percent were willing to consider buying private label grocery from Target.
- Amazon has so far struggled to connect with consumers in the private label grocery arena, coming in last among all grocers, at 37 percent. Awareness for the ecommerce behemoth’s private label brands is also much lower than that of its brick-and-mortar competitors.
- Meijer won with Millennials in terms of their openness to purchasing private label grocery, while Aldi was tops for Gen Xers and Kroger and Trader Joe’s tied for first place among Boomers.
- Consumers expressed loyalty for specific private label grocery brands, as those with higher awareness were considered more often than other brands. Costco’s Kirkland Signature brand scored the highest level of awareness and likeliness to consider, at 94 percent and 78 percent, respectively.
- Other highly rated brands were Sam’s Club’s Member’s Mark and Walmart’s Great Value, at 70 percent likeliness to consider each; awareness of Great Value was slightly higher, at 93 percent, versus 86 percent for Maker’s Mark.