Store-label products are elbowing out big brand names on supermarket shelves. The Wall Street Journal reports that grocery chains are expanding their cheaper, high-margin store brands as inflation pushes more consumers to cut costs.
Big operators including Kroger and Walmart in the U.S. and Carrefour in Europe are expanding their in-house offerings across more price points and product categories, investments that will shift the flow of goods across grocery supply chains.
Supermarkets typically make a higher profit margin on private-label goods than they do from selling branded products from heavyweight suppliers like Kraft Heinz and Unilever. French chain Carrefour says private-label products have become “the heart of our business model” as consumers trade down from costlier brands.
The growth of German discounters Aldi and Lidl, where in-house products outnumber branded goods by about four to one, has also underscored the mass appeal of affordable alternatives.
