Finance & Economics

Shoppers Increasingly Choose Store Brands over Big Food Companies

Affordable store brands have seen the sales growth recently by offering greater discounts than big food brands, as consumer budgets are tightening 

store brands

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Low-cost food sold by brand retailer networks is gaining popularity among consumers for the first time since the pandemic began, according to market-research firm IRI.

Store-branded food and beverages gained 1% of market share over the four weeks that ended July 10. Store brands’ share of reatil spending is now 21.6%, surpassing 2019 levels. The shift began in March along with the rising energy and grocery prices. Before that, big food companies like Kraft Heinz Co. and General Mills Inc. have been consumers’ favs, while private label manufacturers struggled with supply-chain problems. 

However, in recent weeks, store brands have gained sale volumes. They are offering bigger discounts than name brands and quickly restocking supplies. It is a nice change after cheaper brand alternatives struggled to keep up with demand during the pandemic. Even without the discounts, store brands typically cost less, because the retailers don’t add marketing costs to the product price.

The price gap between store brands and national brands has recently widened. The increase happened for the first time since the pandemic started. Unlike the previous increase which aimed to keep up with the public demand, national brands raised prices to offset their own rising costs. Therefore, private-label products are now on average 30% cheaper than analogue national-brand goods.

Some grocery shoppers, struggling with the highest rate of CPI in four decades along soaring gas and rent costs, said that switching to store brands can make a significant difference for household budgets. Besides, the difference in taste and texture for most consumers is minimal. 

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Nina Bobro

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https://payspacemagazine.com/

Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.