Source: GlobalData
Private labels surge as US consumers prioritize value amid inflation and tariff uncertainty, says GlobalData
Posted in Consumer
Following the underwhelming Q1 2025 results from several major US food manufacturers, driven in part by tariff uncertainties dampening consumer spending;
Hannah Cleland, Senior Consumer Analyst at GlobalData, offers her view:
“The ongoing inflationary pressures in the US have driven consumers to prioritize affordability, fuelling a marked rise in private label purchases. With 45%* of US shoppers now turning to these products to manage rising costs, store brands are increasingly seen as credible alternatives to national labels.
“As American shoppers become more discerning, retailers are responding by enhancing the quality of their private label ranges, striving to match the standards set by their European counterparts. Notable examples include Walgreens’ ‘Nice! For You’ range, which emphasizes clean ingredients, and Walmart’s premium private label offerings, which cater to the health-conscious consumers. This move towards higher quality and cleaner ingredients is particularly pertinent as US health secretary Robert F Kennedy Jr is cracking down on artificial additives such as dyes in food and beverages.
“In light of the ongoing trade tensions, partnerships between domestic manufacturers and retailers can serve as a strategic advantage in mitigating potential tariff costs. This approach also helps minimize the risk of consumer boycotts of American brands due to recent tariff announcements. For instance, AB InBev has effectively highlighted its domestic bottling operations in Canada as part of its marketing strategy for brands like Budweiser. In Canada 72%* of consumers strongly/ somewhat agree political events have made them pay more attention to the country of origin of products they buy as of Q1 2025.
“As the landscape of consumer goods continues to evolve, the rise of private label products presents a unique opportunity for both retailers and manufacturers. With growing consumer demand for quality and affordability, businesses must adapt their strategies to leverage the potential of private label offerings while addressing the challenges posed by tariffs and shifting market dynamics.”
*GlobalData Q1 2023 and Q1 2025 global consumer surveys, 22,000 respondents across 42 countries.