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As consumers grow accustomed to grocery private labels, supermarkets have a prime opportunity to drive penetration of their store brands — especially the ones that shoppers are especially fond of, a new report found.
Bain & Company found that H-E-B, Costco’s Kirkland Signature, 365 by Whole Foods Market, Trader Joe’s, and Sam’s Club’s Member’s Mark are the overall “most loved” private brands, noting that surveyed consumers said all of those brands provide good value and quality. The report is based on a survey of more than 20,000 U.S. consumers and uses a proprietary consumer “love” score.
Trader Joe’s, H-E-B and Kirkland Signature received high marks in both center store and perishables. Some brands scored highly in specific categories; Amazon Fresh did well in center store while Publix and 365 shined in perishables.
Among consumer ratings of best quality, taste and value; consistently low prices; and “products I want,” the “most loved” private labels beat out national brands and other store brands, indicating that beloved lines carry strong and positive consumer sentiments.
Consumer awareness of “most loved” brands is up to 18 percentage points higher than other store brands, and these brands are driving awareness through consistent marketing that showcases their value propositions, Bain said. Trader Joe’s, for example, leans into its quirky branding with whimsical packaging, while H-E-B taps into Texas pride with messages about being the state’s top grocer. Kirkland Signature calls out how it compares to national brands.
Grocers that already have brands that consumers “love” see better loyalty and higher wallet share, according to the report. Strong customer advocacy is a key part of fueling a brand’s success as it leads to a higher share of wallet, Bain said.
While most shoppers in the U.S. already perceive private brands as offering better value and lower prices, Bain said that grocers can boost people’s perceptions of uniqueness, quality and trustworthiness — three areas that surveyed consumers associated more with name brands.
Developing and offering fan-favorite brands is particularly important as 80% of consumers say they will continue to shave their overall spending this holiday season — making traditionally lower-cost grocery private brands an attractive option, according to the report.
The festive atmosphere of the winter holidays gives supermarkets the chance to show off quality private brands to build loyalty with consumers with the aim of becoming a “most loved” brand, the report noted.
Even as a spate of retailers and supermarkets such as Target, Grocery Outlet and Kroger have launched new food brands this year, private brand penetration stateside still has plenty of room to grow. The average private brand penetration in food is about 22% in the U.S. — behind the roughly 30% and 35% penetration seen among European grocers, Bain said.
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