The name brands that once ruled America’s grocery carts are losing ground to the cheaper products sitting right beside them on the shelf. According to the Private Label Manufacturers Association, store-brand sales grew nearly three times as fast as national brands last year — 3.3% versus 1.2% — as households squeezed by years of food inflation trade down to save money. What was once a fallback for the budget-conscious has become a mainstream choice, and it is reshaping how grocers and food companies do business.
The shift is rooted in a stretched consumer. Food prices rose 3.1% over the year through May, according to the Bureau of Labor Statistics, on top of years of accumulated increases that have left the typical cart far more expensive than before the pandemic. With the personal savings rate down to 3% in May from 4.5% a year earlier, per the Bureau of Economic Analysis, shoppers have less cushion and more reason to scrutinize every price tag.
They are responding by changing how they shop. Roughly a third of consumers report buying fewer groceries overall, and three in four say they have altered their behavior because of higher prices, according to the 2026 Consumer Expenditures Study from Progressive Grocer. The most common tactics are cutting impulse purchases, clipping coupons, and reaching for private-label alternatives — moves that add up across a monthly food budget.
For grocers, store brands are more than a defensive play; they are a profit engine. Retailer-owned labels typically carry higher margins than national brands because there is no middleman marketing budget to fund, and they build loyalty that keeps shoppers coming back to a particular chain. That is why companies such as Walmart and Kroger have leaned into value positioning and price rollbacks, using their own brands to protect traffic and market share against discounters.
The quality gap that once made shoppers wary has narrowed. Private-label products increasingly match national brands on taste and packaging, and in some categories — from premium olive oil to specialty snacks — store brands now compete at the high end rather than only on price. That evolution has made trading down feel less like a sacrifice and more like a smart choice, accelerating the shift even among higher-income households.
The national brands are feeling the pressure. Packaged-food makers have responded by emphasizing affordability through promotions, smaller price increases, and value-sized packaging, wary of pushing customers permanently toward cheaper rivals. The mood among executives is cautious. “I don’t see how anything will change until the disposable income of the consumer goes up or cost starts to go down in a big way,” said Dirk Van de Put, chief executive of Mondelez International, summing up an industry bracing for a value-focused shopper who may not return to old habits soon.
Different generations are driving the trend in different ways. Millennials and Gen Z are more likely than older shoppers to spend heavily per grocery trip, with millennials spending about $20 more per visit than boomers, according to Progressive Grocer. But younger shoppers are also the most willing to experiment with store brands, meaning the private-label surge may prove durable as their buying power grows.
Technology is adding a new dimension to the competition. Grocers and brands are increasingly turning to artificial intelligence to personalize deals and reach shoppers before they enter the store, a tool that was a major theme at industry events this year. For private label, that means retailers can promote their own products with precision, steering budget-conscious customers toward the higher-margin items on their shelves.
The forces behind the shift show little sign of easing. Gas prices are climbing again on the renewed Middle East conflict, threatening to drain more discretionary income, and food costs remain sensitive to oil through transportation and packaging. Every dollar diverted to the gas tank is a dollar that makes the store brand look more appealing than the premium label.
For shoppers, the rise of private label is a rare bright spot in a hard stretch, offering real savings without a steep drop in quality. For the food industry, it is a lasting change in the balance of power on the grocery shelf — one that rewards the retailers who own the brands and pressures the manufacturers who once set the terms. As long as budgets stay tight, the store brand is likely to keep winning the cart.
JBizNews Desk | New York
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