Study: Low-income households buy private labels the least
A new private-label study revealed findings on retailers and consumers that can inform fresh produce branding decisions: Aldi, Amazon and Target have the fastest-growing private label brands, but despite perception, low-income households buy private labels the least.
And while Walmart dominates in household penetration with four of the five top private-label brands, smaller format grocery retailers lead in private label share.
Market research company Numerator released the most recent results of this ongoing private-label study with more than 10,000 responses monthly, comparing April 1 through June 30 to the same time frame one and two years ago.
Ranked by household penetration, the top private label brands include four Walmart brands:
- Great Value, purchased by 72.7% of US consumers
- Equate, 51%
- Marketside, 44.2%
- Freshness Guaranteed, 40%
- Dollar Tree, 32.5%
This study examines private label trends across channels, retailers, consumer groups and product types. As inflation continues to rise, more consumers indicate a willingness to trade down from branded products to private label.
“The days of treating private label products as untrackable are over,” Numerator CEO Eric Belcher said in the news release.
Private label retailer findings:
- Amazon captures significantly lower private label share in grocery. While Amazon captures higher private label share among its consumer electronics and home goods products, the retailer posts a private label share of 3% among Grocery, Household, and Health & Beauty products.
- Aldi, Target,and Amazon lead in fastest growing private label brands. Aldi private label household penetration grew by 2.3 points from the second quarter of 2021 to the second quarter of 2022, followed by Favorite Day/Target at +2.2 points, Amazon Basics with +1.7, Member’s Mark/Sam’s Club at +1.3 and Kwik Trip at +1.3.
Omnichannel private label findings:
- Within the grocery sector, private label brands account for 17.4% of sales, while branded products account for 82.6%.
- Private label grocery share in the club channel at 32.1% is about twice that of other channels. Club is followed by Mass (22.6% private label share), Online (20.2%), Food (18.6%), Dollar (9.9%) and Drug (4.7%).
- Private label grocery share is lowest among low-income households. Despite a perception of private label as a brand for cash-strapped households, private label grocery items hold similar share among low income (17.1%), middle income (17.9%), and high income (17.2%) consumers.
Private label consumer sentiment findings:
- High-income consumers have the most favorable opinions of private label products. More than half of high-income shoppers (56.9%) rate private label products’ value as excellent or above average, compared to 55.2% of middle income and 52.5% of low income shoppers who said the same.
- As inflation continues to rise, price is becoming more important than brand name for many consumers. In recent months, the number of consumers who say price is more important than brand name has grown across all income levels.
- More middle- and high-income consumers are buying private label to save money. Nearly two in five high-income (39.5%) and middle-income (38.8%) consumers are purchasing private label as a cost-saving measure.
