IN SUMMARY: According to Progressive Grocer “millennials are proving crucial to grocers’ efforts to expand their private label share. 60 percent of Millennials stated that they believe their store brand is better than others, and 54 percent say that their choice of store is actually influenced by the retailer’s store brand.
Cadent ’s business analyst says “Millennials continue to drive industry trends in the grocery and consumer packaged goods markets, so it comes as no surprise that Millennials are also the generation driving growth in private label. They not only already buy more private label than other generations, with about one-third of their shopping cart filled with private label products, but about half say that they plan on buying more next year.”
Why are millennials turning to private label?
According to Cadent the number one reason millennials are purchasing private label has to do with “value for their hard-earned dollars”. In addition, some stores are adding “premium” private label products and millennials trust some store brands over national brands. This is especially true at premium retailers like Whole Foods and Trader Joe’s.
Price increases coming at a bad time for brands
Some brands are raising prices but as one senior executive said: “these price increases couldn’t have come at a worse time”. When asked how he planned to deal with price increases in certain categories he responded “I’m going to look to expand my private label assortment”.
Are brands failing?
The answer to that would be a huge “yes”! A lot of brands are so entrenched in buzzwords like “big data” and “blockchain” that they’re forgetting to focus on what’s really important to consumers “value & price”.
For me, the tip that private label was getting hot was Amazon’s huge shift into the category. Amazon has added hundreds of private label items and from preliminary research, customers are very happy with their purchases.
While consumers, especially millennials, are smuggling with things like student loan debt and trying to save enough money to purchase a house they are shifting their purchases away from