10 Secrets About Store Brands

Sure they cost less, but the quality in many goods is equal to their more recognizable competition

Store brands — those generic labels we often equate with bargain quality — are among the fastest growing and most popular items for sale today. They provide more choices, help us save money and have come a long way from the bottom-shelf, hokey-labeled products from decades past. But not all store brands are created equal. You may be surprised to learn that an in-house brand isn’t always what it seems.

A typical generic product (also called “private label”) yields a higher profit for the store, even when it sells for a lot less than the similar national brand. That’s because there are no marketing or advertising costs involved and why companies invest a good amount of money in creating private labels. Name-brand consumers pay for those Superbowl ads in the form of higher per-item prices.

“Private label provides value and it’s higher margin,” says Natalie Berg, Global Research Director at Planet Retail, a retail intelligence agency in London. “In a down economy, it really ticks two boxes — boosts the bottom line and drives loyalty.”

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