Why Store Brand Sales Are at a Record High — and What It Means for Your Retail Strategy

There's a number that gets cited a lot in grocery industry conversations right now: $282.8 billion. That's the estimated total U.S. store brand sales figure as of 2025, and it represents a record high that would have been difficult to project even five years ago. Private label — for most of its history considered a budget category that shoppers tolerated when they couldn't afford the national brand — has become something fundamentally different. It's become a preference.

Understanding why store brand sales are at a record high, and more importantly what that means for how retailers should be thinking about their private label programs right now, requires looking past the headline number to the structural changes in consumer behavior and retail economics that produced it.

What's Actually Driving the Growth

The narrative that private label growth is purely a function of inflation and economic pressure is true but incomplete. Yes, the sustained period of elevated food prices that began in 2021 and persisted through 2024 pushed a significant segment of shoppers toward store brands who might not have considered them before. Value is always a driver in private label adoption. But what's different about the current cycle of growth is that many of those shoppers haven't come back to national brands even as price pressures have moderated.

The reason for that stickiness is quality. Consumer research from Daymon Worldwide found that 94% of consumers say private brand products fit their lifestyle as well as national brands. That's not the finding of a shopper who switched to store brands grudgingly and is waiting for an opportunity to switch back. That's a consumer who has genuinely updated their priors about what private label means.

The quality improvement in private label over the past decade has been substantial and real. Retailers who were previously content to offer passable national brand alternatives in their store brand programs have significantly raised the bar on supplier qualification, sensory evaluation, and product development. The result is a cohort of private label products — particularly in fresh, refrigerated, and premium dry grocery — that genuinely compete with or outperform national brand counterparts. Shoppers notice.

There's also a generational dimension to the growth story. Younger shoppers — particularly Millennials and Gen Z — don't carry the same brand loyalty baggage toward national brands that older generations do. They're more likely to evaluate a product on its own merits, more likely to research ingredients and sourcing independently, and more likely to view the national brand's marketing spend as overhead they're being asked to fund unnecessarily. Private label's lack of advertising history is, paradoxically, a feature for these consumers rather than a liability.

What It Means for Retailers Who Haven't Prioritized Private Label

If you're a grocery retailer whose private label program has been an afterthought — a handful of commodity SKUs offered as a low-price alternative with minimal quality investment — the $282.8 billion market figure represents both an indictment and an opportunity.

The indictment: every dollar your customers spend on private label products from competitors is a dollar that's building loyalty to a competitor's store brand program. Private label is no longer neutral — it's actively differentiated. A retailer with a well-executed store brand program has products that shoppers can only get at their stores. A retailer without one is entirely dependent on national brands that are available everywhere.

The opportunity: private label market share still has significant headroom. Despite the record sales figures, store brands account for roughly 20-25% of U.S. grocery sales by unit — which means 75-80% of purchases are still going to national brands. In Europe, where private label programs are more mature, store brand penetration in some markets exceeds 50%. U.S. grocery retail is still in the middle of a structural shift, not at the end of one.

For retailers who want to accelerate their private label programs, the most important strategic decision is not which products to add first — it's whether to build the supplier sourcing infrastructure internally or to partner with an experienced private label broker. PCC Sourcing works with retailers at every stage of private label program development, from initial category strategy through ongoing supplier management. The retailers who grow their store brand programs fastest are typically the ones who get the sourcing infrastructure right from the beginning rather than rebuilding it after their first quality failure.

The Categories Where Growth Is Strongest

Not all private label categories are growing equally, and knowing where the strongest momentum is helps retailers prioritize program expansion investments.

Refrigerated and fresh departments have been among the strongest performers for private label growth, driven by consumer preference for fresh, clean-label products and the natural alignment between fresh perimeter products and a retailer's own brand identity. A grocery store's private label fresh pasta or refrigerated salad dressing has an inherent authenticity that a private label cereal may not, and consumers have responded to that positioning.

Health and wellness — including vitamins, supplements, organic products, and free-from items — is another fast-growth area. Consumers in this space are particularly price-conscious because health-oriented national brand products carry significant price premiums. A store brand vitamin C that's formulated to the same specification as the leading national brand and priced 40% lower is a genuinely compelling offer to a health-conscious shopper who was already skeptical about whether they were paying for marketing or product quality.

Premium dry grocery — artisan crackers, specialty sauces, premium coffee, single-origin items — is the fastest-growing tier within shelf-stable grocery private label. Retailers who have only offered entry-level store brand alternatives in their dry grocery aisles are leaving significant margin on the table by not serving the premium shopper segment with their own branded products.

Translating the Trend Into a Concrete Strategy

Record-level private label sales growth is the backdrop. What a retailer does with that information depends on where their program currently stands. For retailers who already have mature private label programs, the growth environment suggests doubling down on the categories where their programs are strongest and adding premium sub-brands that can capture shopper trade-up. For retailers in earlier stages, it suggests prioritizing the highest-volume, most defensible categories — typically dry grocery staples and health and beauty care — and building quality credibility before expanding broadly.

Regardless of stage, the retailers capturing the most value from this growth environment are doing two things consistently: investing in supplier quality rather than chasing lowest-cost sourcing, and treating their private label program as a genuine brand rather than a commodity offering. Both of those orientations are easier to maintain when you have an experienced sourcing partner who has built the supplier relationships and quality systems that underpin them.

If you're ready to build or accelerate your store brand program in this historic growth environment, PCC Sourcing is the partner to talk to first.