Blog post

Consumers Switch to Store Brands to Combat Inflation

By Kassi Socha | September 21, 2022 | 1 Comment

MarketingCustomer Acquisition and RetentionIndustry Marketing ExecutionMarketing Leadership and Strategy

Trading Down is on the Up & Up

When hosting friends over for dinner, I used to hide the fact that I bought generic or store brand versions of my favorite brands. I bought glass decanters to pour Kirkland Signature liquor into and recycled away the bottles before anyone could see them. Similarly, I’d pour generic brand hand soap into previously used dispensers from more premium brands.

Over the past few years, my behavior has changed. I recently served Target’s Good & Gather fruit pouches at my son’s birthday party without hesitation. My new mattress? Happy to share it’s a top-reviewed Amazon brand choice. My favorite shoes I get complimented on again and again? They’re a private label find from Nordstrom Rack!

I’d like to say I’ve made some inherent physiological shift to care less about the way I’m perceived by others but like many consumers, I’ve just come to trust that “trading down” is no longer synonymous with losing value or quality. I still recently splurged on a pair of designer sunglasses and won’t let go of my favorite face shampoo that costs more than I care to admit.

Yet, as I consider how inflation has impacted our household spending and budget, trading down is certainly better for our wallet. Thanks to social media, I also know some of my favorite store brand trades are actually manufactured by name brands I know and trust.

I’m not alone. When we recently surveyed the Gartner Consumer Community, 53% of respondents said they had “traded down” in one or more categories in the past year. Specifically more than ⅔ of those consumers had traded a name brand to a store brand in at least one food, grocery or non-alcoholic purchase in the last year (see below figure).

Consumers Trade Down for Store Brands

Why are consumers trading down to store brands?

  • In Response to Inflation – Consumers Seek to Save Money: According to the Garner Consumer Community in early September, consumers stated that trading down is one of the many ways they’re combating inflation and the price increases they’re experiencing in the goods they purchase.
  • Social Media has “revealed” the Premium Brands behind Store Brands: The rise of social media – specifically TikTok – has brought renewed focus to who is actually behind store and generic brands. If you buy Kirkland Diapers at Costco, you can trust they’re made by Huggies. ALDI’s tuscan garden restaurant style dressing tastes oddly similar to Olive Garden’s dressing that is on average $2 more. Trader Joe’s Pita Chips are rumored to be manufactured by Stacy’s Naked Pita Chips. I learned all of this from a five minute deep dive on TikTok. Once known, consumers are more likely to trust the quality and value a store brand alternative provides.
  • Retailers Have Invested in Store Brand Quality & Aesthetic: Store brands now make up around 21% of sales in the $1.17 trillion US grocery industry, according to IRI. In its first nine months, Target’s popular Good & Gather grocery brand surpassed $1B in sales. This brand and other store brand alternatives are seeing growth because the look and feel of the product packaging is no longer bland. Many store brands’ packaging is bright in color and highlight trending product features such as “organic” or “sustainable”. They mimic items you might see from a direct-to-consumer disruptor rather than a lower quality trade off.

The success of store brands is a combination of consumers seeking to save money in response to inflation fatigue, multibrand retailers seeking to gain additional margin by creative repositioning of store brands through enhanced aesthetic and improved quality, and the proliferation of social media reveals and sleuthing.

How Brands Can Protect Consumer Loyalty in an Inflationary Market

While trading down is certainly on the rise, there’s still hope for brands. Don’t worry, 53% of consumers can name one or more brands they would insist on continuing to purchase when seeking a great deal or “trade down” opportunity. But with inflation continuing to put pressure on consumer’s everyday decisions, marketers need to make every effort to protect their spot on the shelf – virtual or physical.

For brands looking to protect their brand and discourage consumers from trading down, they should focus on:

  • Messaging quality and value
  • Call out unique, key features
  • Focus on a great customer experience – particularly customer service


Supported Data and Analysis by Dan Gutter of Gartner’s Consumer and Culture Insights Team

The Gartner Blog Network provides an opportunity for Gartner analysts to test ideas and move research forward. Because the content posted by Gartner analysts on this site does not undergo our standard editorial review, all comments or opinions expressed hereunder are those of the individual contributors and do not represent the views of Gartner, Inc. or its management.

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1 Comment

  • sameer says:

    I believe the first point is worth a lot, as in any industry and field understanding the competitor strategies plays a very crucial roles. overall a very article, Thanks, Kassi Socha.