Private Labels Surge As US Consumers Prioritize Value Amid Inflation, Tariff Uncertainty

Following underwhelming Q1 2025 results from several major US food manufacturers – driven in part by tariff uncertainties dampening consumer spending – the ongoing inflationary pressures in the US have driven consumers to prioritize affordability, fueling a marked rise in private label purchases, says Hannah Cleland, a senior consumer analyst at GlobalData.

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, analysts say.

“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,” said Cleland. “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.”

Strategic Advantages in Mitigating Potential Tariff Costs

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. AB InBev, for example, 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.