CHICAGO – According to a recent industry analysis by NielsenIQ, private labels—traditionally seen as budget alternatives—are now central to retailers’ growth strategies, with U.S. sales rising 4.1% yearly. Nearly half of American consumers say they buy more private label products than ever, driven by economic pressure and elevated product expectations.
Retailers are investing heavily in tiered store-brand strategies, offering everything from value to premium product lines. This approach broadens appeal across price points and allows national brands to coexist on the same shelves, strategically placed for maximum shopper engagement.
While private labels surge, national brands still hold a potent edge in categories where emotional connection and trust are paramount. Products in the health, beauty, and wellness sectors remain strongholds for name brands, thanks to consumer perceptions of efficacy and long-established brand loyalty. 62% of consumers still default to trusted branded products, citing emotional ties and proven performance.
Three Ways Private Label and Branded Products Coexist
The relationship between private label and national brands is no longer a zero-sum game. Instead, it’s a dynamic partnership reshaping modern retail strategies. While private labels continue to deliver strong growth, value, and innovation, national brands still command consumer trust, emotional loyalty, and category leadership. Today’s most innovative retailers are not choosing sides—they’re creating shelf ecosystems where both can thrive. Here’s how:
1. Tiered Assortment Strategy
Retailers are moving beyond the outdated view of private label as a single, budget-friendly tier. Now, there are many tiered private label lines. This approach caters to a broader range of consumer needs and price points, whether for daily essentials or premium indulgences.
With 60% of U.S. consumers buying more brands across more categories than ever, this strategy helps avoid cannibalization between private and branded offerings. Instead, it broadens category appeal, drives customer satisfaction, and strengthens retailer brand equity. Consumers benefit from greater choice, and retailers benefit from margin growth—a win-win.
2. Trust and Halo Effects
While private label earns consumer favor, national brands still excel in emotional connection and perceived reliability, especially in trust-sensitive categories like health, beauty, and wellness. These brand leaders create a halo effect, lending credibility to adjacent private label items and reinforcing the overall quality perception of the store’s offering.
In fact, 59% of consumers trust store brands precisely because the retailer endorses them. Branded products also shine online, where brand familiarity drives clicks and conversions. Retailers can maximize this by curating omnichannel experiences—bundled promotions, intelligent product placement, and personalized recommendations—that use the strength of national brands to lift the entire shelf.
3. Private Label as Traffic Driver
Modern private labels are more than low-cost alternatives—they are innovation engines. From bold new flavors and eco-friendly claims to eye-catching design, private label lines are becoming key traffic drivers. They draw consumers into physical and digital retail spaces, and once there, shoppers often add branded products to their baskets as well.
With 54% of U.S. consumers saying brand doesn’t matter if the product meets their needs, relevance and accessibility take center stage. Retailers should keep investing in private label storytelling while giving national brands visibility through curated displays, digital content, and value-led promotions. The result is a holistic shelf experience that blends discovery, trust, and value.
The message for retailers and brands in NielsenIQ's analysis is clear: collaboration, not competition, will define the next phase of retail growth. By crafting smart assortments and focusing on what makes each offering unique—price, trust, or experience—retailers can maximize value and loyalty in an increasingly diverse consumer landscape.
Download the full U.S. Private Label Report to explore how private label and national brands are reshaping retail.
