Store Brands Are Growing Fast: Walmart and Target Lead the Way

Did you know Walmart's Bettergoods brand has reached 16% of U.S. households in under a year? Store brands (also called private labels) are becoming more popular than ever, and big retailers like Walmart and Target are creating more of their own products.

In this article, we'll explore:

• The growth of the $271 billion store brand market
• How Walmart and Target are creating better store brands
• What this means for shoppers and other brands
• Future trends in store brands

Store Brands Are Booming

Store brands now make up a $271 billion market and are growing faster than before. Recent studies show that 6 out of 10 shoppers are buying more store brand products than last year.

People aren't just buying store brands because they're cheaper. Many shoppers now choose store brands for their quality and unique products that national brands don't offer.

Walmart and Target's Store Brand Strategy

Walmart's Bettergoods

Launched in April 2024, Bettergoods is already in 16% of American homes. This brand offers quality food items without high prices.

With Bettergoods, Walmart is building customer loyalty through store-exclusive products. By controlling the supply chain, they maintain quality while keeping prices low.

Target's Dealworthy

Target's Dealworthy line has reached 9% of households despite being less than a year old. It focuses on everyday essentials across many categories.

Target displays these products alongside national brands rather than in separate sections. This helps shoppers see store brands as quality choices, not just cheaper alternatives.

Winners and Challengers

Benefits for Shoppers

• Higher quality products
• More innovative options
• Better information about product sources

Advantages for Retailers

• Higher profit margins (25-30% versus 15-20% on national brands).
• Increased customer loyalty.
  
• More control over products and pricing.

Challenges for National Brands

• Less shelf space as stores prioritize their own products
• Pressure to lower prices
• Need to innovate faster

"Store brands are no longer just about saving money; they're about quality and innovation," says retail expert Sarah Johnson.

The Future of Store Brands

New Developments to Watch

• AI-driven product development to spot trends early
• Increased focus on sustainability and ethical sourcing
• Expansion of store brands to online channels

Have you tried Walmart's Bettergoods or Target's Dealworthy? Shopping habits are changing, and store brands are leading this change.

Need help with your retail strategy? Our team specializes in helping businesses navigate these changes—contact us today.