As Australians navigate the pressures of rising living costs, a quiet movement is taking place in supermarket aisles: savvy shoppers are increasingly reaching for private-label, store-brand products. Shopfully country manager for Australia, Brendan Straw, outlines the strategies businesses can use to get ahead.
Recent research conducted by YouGov, and commissioned by Shopfully, reveals a near unanimous, 95 per cent of Australians are open to purchasing store-brand products when grocery shopping.
Source: Shopfully
While affordability is the key driver (68 per cent), quality perception, health choices, and sustainability considerations are also influencing this growing preference. In fact, consumers indicated they would choose a private-label brand if the quality matches a competitor product (63 per cent) or if the taste is superior to other well-known options (43 per cent).
From niche to norm: the private-label evolution
Traditionally, branded products have held a competitive advantage in the marketplace. Their edge lay in strong marketing strategies, extensive advertising campaigns, and established brand loyalty.
Shoppers gravitated towards well-known brands due to perceptions of consistent quality, trust, and even status. In many cases, brands became household names through storytelling, celebrity endorsements, and visibility across media channels, creating a psychological comfort zone for consumers.
However, the landscape is changing rapidly. Private-label products – those owned and sold by retailers under their own brand name – are no longer the generic, no-frills options of the past.
Today’s private-label offerings span everything from budget essentials to premium products, competing head-to-head with national brands. Retailers have become more strategic, investing in product development, quality testing, and even packaging design to ensure their store brands appeal to modern shoppers.
Shopfully country manager for Australia, Brendan Straw, said: “This shift isn’t just about finding the best deals – it signals that private-label brands have truly earned their stripes by delivering real value, impressive quality, and building deep consumer trust through innovation and a sharp understanding of shopper needs.”
The secret sauce to private-labels
As the market continues to evolve, one thing is clear: consumers are more willing than ever to experiment and switch brands. While private-label products are gaining momentum, branded labels still hold significant value. Shopfully research reveals that only 17 per cent of Australians remain consistently loyal to specific brands, highlighting a major opportunity for both private and branded labels to capture the attention of flexible shoppers.
This shift in consumer behaviour has been driven, in part, by the success of private-label brands in balancing affordability with quality. Private-label brands offer competitively priced products without cutting corners.
This approach is particularly effective in essentials like household items and everyday groceries, where price sensitivity is high. Retailers and brands alike can benefit from adopting similar strategies, ensuring that quality remains a priority even when keeping costs low.
Innovation and differentiation also play a critical role in the success of private-label products. Many have expanded into premium and niche categories such as organic, gluten-free, and gourmet lines. This move not only attracts value-driven shoppers but also appeals to those who prioritise quality and sustainability.
Branded labels can learn from this approach by exploring new product innovations that align with evolving consumer preferences, particularly around health and environmental consciousness.
With so many shoppers willing to switch brands, retailers should focus on delivering strong value propositions. Offering extended promotions, exclusive deals, and loyalty incentives can help build lasting relationships with consumers. A thoughtful blend of private-label and branded products within a retailer’s offering can also maximise consumer choice and satisfaction, providing a competitive edge in a crowded marketplace.
“The rise of private labels is more than just a passing trend – it’s a direct response to shifting consumer priorities. By focusing on affordability, quality, and sustainability, both private and branded labels can gain favour with shoppers, creating deeper consumer loyalty,” said Straw.
Implications for retailers and brands
The takeaway is evident: a powerful opportunity exists for both growth and differentiation.
For retailers, the growth of private-label products represents an opportunity to increase profit margins and build brand loyalty.
By developing exclusive products that can only be found in their stores, retailers can differentiate themselves in a competitive market. Additionally, private labels give retailers more control over the supply chain, allowing for greater agility and pricing power.
For branded manufacturers, this shift is a wake-up call and an opportunity to double down on innovation, customer loyalty, and omnichannel engagement. Finding new ways to continuously drive value will be key.
Whether through unique product features, sustainable practices, or stronger brand narratives, brand-labels must offer a compelling reason for consumers to choose them over increasingly sophisticated private-label options.
Shopfully is the international tech company leader in Drive to Store that connects millions of shoppers with the local stores around them. The company is now a partner to over 500 top retailers and brands in 25 countries, and reaches 200 million users globally.
