Shoppers are trading down to private-label store brands without even realizing it

Many consumers are buying retailers’ cheaper alternatives to name-brand items without even meaning to

Many consumers are buying retailers’ cheaper alternatives to name-brand items without even meaning to.

So-called private-label products have been getting more popular for years as inflation-weary shoppers hunt for bargains. U.S. sales of store-brand products rose nearly 4% last year to a record $271 billion, the Private Label Manufacturers Association estimated in January. But it isn’t just affordability driving the shift. Many customers can’t distinguish name-brand products from private-label ones as well as they think they can.

About 71% of consumers surveyed recently by First Insight said they knew when they were buying a private-label item. But when the retail market-research firm showed them in-house and name-brand products side by side, virtually the same share — 72% — failed to correctly identify the private-label one.

“Companies are savvy in how they market,” First Insight CEO Greg Petro said of the findings. “It’s not just consumers that can be fooled, it’s experts.”

And the experts say that’s by design.