As shoppers brace for rising prices and ongoing uncertainty, the real shift in grocery is unfolding in the aisle, where national brands and private labels compete directly more than ever for shopper loyalty.
Back in January 2025, 52% of shoppers expected grocery prices to increase. Fast forward to now and that number has jumped to 70%. That’s a sharp rise in a matter of months, driven by growing concerns around food affordability and new government policies. Not surprisingly, 56% of shoppers say their need for coupons and savings will increase, and 71% say discounts and coupons are important when making purchase decisions.1
According to the 2025 Wells Fargo Money Study, more than three-quarters of Americans are cutting back on spending, with over half delaying purchases to adjust to an uncertain economy.
Uncertainty continues as a federal appeals court temporarily paused a lower court’s ruling to block the Trump administration’s tariffs. Given how difficult it is to discern which goods will ultimately be tariffed, many importers are paying tariffs rather than navigate the complex process of verifying eligibility under USMCA, according to David Ortega, a food economist and professor at Michigan State University.
So what does this mean for CPGs?
Private Label Becomes an Increasing Threat
Once viewed as the compromise choice, store brands are now considered reliable, high-quality alternatives by a growing share of shoppers. And the numbers back it up.
According to Inmar’s May 2025 Shopper Behavior Survey, 39% of shoppers say they’ve switched to a store brand within their last few trips, with an additional 11% having done so since prices began rising earlier this year.
The shift is even more pronounced among key demographics:
- 49% of households with children under 18 have recently switched to store brands. This represents a clear signal from value-driven families managing tight budgets.
- 46% of households earning $100K+ annually reported switching recently, compared to just 26% of those earning under $25K. What can you glean from this is that Higher-income households might have larger average basket sizes , prompting them to make more deliberate trade-offs to manage overall grocery bills.
- Millennials and Gen X are the most active brand switchers, with 45% reporting recent private label purchases, compared to 31% of Gen Z and 33% of Boomers.
This suggests that life stage and household responsibilities are stronger drivers than age alone.
Retailers: Redefine Value Through Private Label
Retailers are uniquely positioned to lead in this environment, especially as private label perception continues to improve. With full control over shelf placement, loyalty ecosystems, and retail media networks, retailers have tools to elevate private label from a budget buy to a trusted brand.
Here’s how retailers can build on that momentum:
- Elevate the store brand story: Private labels are no longer viewed as inferior. Use branding and storytelling to highlight quality, local sourcing or innovation that builds trust and loyalty.
- Deliver personalized value: Tap into loyalty data to surface the right promotions to the right shoppers to drive both trial and repeat purchases.
- Maximize media influence: Leverage your RMN to promote private label in key moments, from pre-trip planning to in-store discovery all the way to post-purchase follow-up.
CPG Brands: Compete With More Than Price
For national brands, holding ground against increasingly polished private label offerings means leaning into your strengths.
Here’s how to deliver value in smarter ways:
Incentivize strategically
National brands have a powerful edge in first-party shopper data, enabling personalized promotions like digital coupons to re-engage lapsed shoppers or loyalty rewards that deepen engagement. Multi-item and bundle offers informed by basket analysis can deliver meaningful value without diluting premium brand perception.
Pair promotions with smarter media
Retail media networks and contextual digital channels allow for precise, in-the-moment messaging. Whether it's reaching shoppers mid-trip or engaging deal-seekers in high-intent moments, data-driven placements ensure offers reach the right audience and resonate with them.
Reinforce your brand difference
With robust brand assets at your disposal, focus on storytelling that highlights what sets you apart, whether that’s your product quality, sustainability efforts, or innovation. Value isn’t just about price; it’s about making your brand’s worth clear and compelling in every interaction.
Whoever Communicates Value Best, Wins
Private label isn't just gaining ground because of price, it’s also gaining trust as it overcomes the lower quality perception it had for many years, especially in the times we live in.
In a market where value is being redefined daily, both CPG brands and grocery retailers must adapt in both price and perception. Those who understand what value means to today’s shopper and deliver it clearly will be the ones who thrive.
Footnotes:
1. Inmar May 2025 Shopper Behavior Survey