One in every three Canadians are buying more store brands to offset food inflation.
But retailers are trying to boost that number by changing a common perception among shoppers: That store brands just aren’t that good.
Driving the news: Per The New York Times, store brands, also known as private label brands, are gaining ground on well-known consumer brands, and it’s not just because shoppers want to save cash — retailers are also adding variety and increasing quality.
- They’re also building brand love through snazzy redesigns and tapping into online hype. Aldi, a U.S. grocer, recently launched a clothing line that’s been a hit on TikTok.
In Canada: Loblaw introduces hundreds of President’s Choice products every year and has recently dialled up social media marketing for its No Name brand. Sobeys parent company, Empire, has also added over 1,000 products under its Compliments brand since 2020.
- Shoppers Drug Mart added 40 new products to its Quo beauty line this year, while Circle K and Couche-Tard will launch more than 100 products over the next year.
Why it matters: Private label sales surge whenever household costs go up, but they can’t get by on price alone anymore. With consumers taking more pride in cooking at home, retailers are ensuring their products are high-quality and packaging Instagram-worthy.
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Stores have been able to keep the costs of their private label brands competitive because they avoid the fees that they charge name brands to stock their products.
- More shelf space could open up as brands struggle to compete: Analysts believe the competition was one reason Kimberly-Clark pulled its Kleenex brand from Canada.
Zoom out: Loblaw, Empire and Metro have pointed to their respective private labels as major revenue drivers this year, with growth at all three outpacing national brands.—JK