How retailers are taking control of formulation, packaging, pricing, quality and consumer trust
Private label is no longer the cheap alternative sitting beside the “real” brand.
It is becoming a brand in its own right.
Across Europe and North America, retailers are increasingly taking control of the entire product proposition. They decide what the product should be, what ingredients or specifications it should contain, how it should be packaged, where it should be positioned on the shelf and, crucially, what price the consumer should pay.
The manufacturer still plays a critical role. Manufacturers provide the factories, technical expertise, food science, quality systems, sourcing capabilities and production capacity. But increasingly, the retailer owns the consumer proposition.
This represents a profound shift in the balance of power between retailers, manufacturers and traditional branded companies.
And it raises the most important question of all:
**If a retailer can offer a product of comparable quality at a lower price, why should consumers continue paying a premium for the traditional brand?**
The answer explains much of what is happening in grocery retail today.
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# 1. Private label is no longer synonymous with “cheap”
For decades, private label had a relatively simple reputation.
The consumer knew the national brand. The supermarket alternative was cheaper.
Private label was often positioned as the economical choice for consumers who wanted to save money.
That model is changing.
Retailers are now developing sophisticated ranges across multiple price levels:
* entry-level/value products;
* mainstream own-label products;
* premium private label;
* specialist products;
* healthier products;
* organic and sustainable products;
* restaurant-style meal solutions;
* innovative products aimed at specific consumer trends.
The premiumisation of private label is particularly significant.
In the UK, premium own-label sales grew 9% during Christmas 2025 and exceeded £1 billion in a single month. Premium own-label products appeared in 92% of shoppers’ baskets during that period.
This is not the behaviour of a market that sees private label simply as “cheap.”
It is the behaviour of consumers who increasingly see retailer-owned products as legitimate alternatives to established brands.
—
# 2. The retailer is becoming the product owner
The fundamental change is control.
Under the traditional branded model, the manufacturer owns the brand and largely determines the product proposition.
The retailer buys the product and sells it.
Under the modern private-label model, the relationship can work very differently.
The retailer can determine:
**The formulation**
The retailer can specify ingredients, nutritional targets, taste profiles, performance requirements and technical specifications.
**The packaging**
The retailer can decide the pack size, materials, graphics, colours, messaging and shelf presentation.
**The positioning**
The retailer determines whether the product is value, mainstream or premium.
**The price**
The retailer can establish the target consumer price and work backwards through the supply chain.
**The volume**
Large retailers can provide substantial and relatively predictable production volumes.
**The consumer proposition**
The retailer knows who is buying the product, what they buy alongside it and how frequently they return.
This changes the role of the manufacturer.
The manufacturer becomes less dependent on creating consumer demand through its own brand and more focused on becoming an expert production and innovation partner for the retailer.
—
# 3. So why can private label be cheaper?
This is the central economic question.
If the quality is comparable, where does the price advantage come from?
The answer is that **the price of a product is not simply the cost of its ingredients or manufacturing**.
A traditional branded product may carry substantial costs associated with:
* national advertising;
* television and digital campaigns;
* celebrity endorsements;
* sponsorship;
* brand management;
* consumer research;
* packaging development;
* promotional investment;
* sales teams;
* distribution;
* retailer negotiations;
* trade marketing;
* brand-building activities;
* shareholder expectations around brand investment.
Private label can operate with a different economic structure.
The retailer already owns the customer relationship.
It already has:
* stores;
* websites;
* loyalty programmes;
* mobile apps;
* customer data;
* shelf space;
* distribution infrastructure;
* millions of existing customers;
* an established corporate reputation.
The retailer therefore does not necessarily have to spend the same amount of money building awareness for every individual product.
The supermarket itself can act as the brand.
That is a major economic advantage.
—
# 4. The supermarket already has consumer trust
This is one of the most underestimated elements of private label.
A new national brand has to persuade consumers to trust it.
A retailer may already have that trust.
When a consumer walks into a supermarket they already know, they may not ask:
**“Who made this product?”**
They may ask:
**“Is this a product I trust from this retailer?”**
That distinction is extremely important.
The trust relationship is moving from the individual manufacturer to the retailer.
A consumer who trusts a supermarket’s fresh food, meat, baby products, household products or premium food range may transfer that trust to the retailer’s own-label products.
The product therefore benefits from an existing brand ecosystem.
—
# 5. The data advantage
Retailers also possess something that many manufacturers cannot replicate:
**direct access to purchasing data.**
A major retailer can see:
* what consumers buy;
* when they buy it;
* what products they switch from;
* what price points work;
* which promotions work;
* which pack sizes work;
* which products are repurchased;
* which products fail;
* which consumer groups buy premium products;
* what happens when the price changes.
This creates a feedback loop.
The retailer launches a product.
Consumers respond.
The retailer measures the response.
The formulation, packaging, price or promotion can then be adjusted.
The product can evolve continuously.
Traditional brands have sophisticated research and data too, but retailers have one enormous advantage:
**they see the transaction at the point of purchase.**
—
# 6. Scale creates another advantage
Large retailers can also use purchasing power.
When a retailer orders substantial volumes, the manufacturer can achieve greater production efficiency.
Large production runs can improve:
* factory utilisation;
* procurement;
* ingredient purchasing;
* packaging purchasing;
* logistics;
* production planning;
* inventory management.
The manufacturer does not necessarily have to spend money building consumer awareness for the product because the retailer is already providing access to the market.
That can make the economics of private label attractive for both parties.
The retailer obtains a competitive product.
The manufacturer obtains volume.
The consumer obtains value.
—
# 7. The important distinction: cheaper does not automatically mean lower quality
There is an important misconception that needs to be challenged.
**Private label is not automatically lower quality.**
At the same time, it would be wrong to say that every private-label product is identical in quality to every national brand.
Quality depends on the specification.
A retailer can instruct a manufacturer to produce a very inexpensive product using a lower-cost specification.
But the same retailer can also instruct the manufacturer to produce a premium product using high-quality ingredients, sophisticated technology and demanding quality standards.
The manufacturer makes what the retailer specifies.
Therefore, the more accurate statement is:
> **Private label can deliver comparable or superior quality at a lower consumer price when the retailer uses its scale, control and existing consumer relationship to remove unnecessary costs from the proposition.**
That is a much stronger argument than simply saying private label is “the same product for less.”
—
# 8. Sainsbury’s: private label becomes a premium brand
[Sainsbury’s own-brand strategy and results](https://corporate.sainsburys.co.uk/news/press-releases/preliminary-results-for-the-52-weeks-ended-28-february-2026/?utm_source=chatgpt.com) provide one of the clearest examples.
In 2026, Sainsbury’s reported that it had launched more than **1,200 new own-brand products** during the year, around half of them in its premium *Taste the Difference* range. The retailer also reported that *Taste the Difference* had surpassed **£2 billion in sales**.
That is strategically significant.
A private-label range exceeding £2 billion in annual sales is no longer merely a substitute for branded products.
It is a major consumer brand.
Sainsbury’s describes the proposition around quality, innovation, flavour and affordability, while its premium range increasingly targets the restaurant-quality experience at home.
The retailer is therefore doing something traditional brands have historically done:
**building an emotional and quality-based proposition around a branded range.**
The difference is that the brand belongs to the retailer.
—
# 9. Waitrose: premium retailer, private-label economics
Waitrose provides an even more interesting example because it is positioned as a premium retailer.
In May 2026, Waitrose announced an investment of more than **£20 million** to reduce prices across more than 160 own-brand products.
Prices were reduced by an average of 12%, with some products reduced by more than 25%.
The retailer specifically stated that it was maintaining its standards around quality, sourcing and welfare.
This is important.
If private label were simply a low-cost strategy, we would not expect a premium retailer to invest so heavily in making its own-brand products more competitively priced while simultaneously emphasising quality.
Waitrose had already invested **£162.5 million** through nine rounds of lower prices since 2023, covering more than 1,000 products.
The message is clear:
**premium quality and value are no longer opposites.**
The retailer is attempting to provide both.
—
# 10. Waitrose is also proving that premium private label can grow
The same story can be seen at the upper end of Waitrose’s range.
Its No.1 premium private-label range recorded approximately **30% sales growth** in the year ending January 2026.
This is important because it demonstrates that consumers are not necessarily trading down to private label simply because they have less money.
They can also trade **up within private label**.
That is a major structural change.
The consumer journey can now look like this:
**National brand → mainstream private label → premium private label.**
The retailer can therefore capture multiple price points without surrendering the customer to an external brand.
—
# 11. Asda: value plus product innovation
[Asda’s 2026 product and price strategy](https://corporate.asda.com/newsroom/2026/19/05/asda-unveils-new-ranges-lower-prices-and-a-renewed-in-store-experience?utm_source=chatgpt.com) shows another side of the transformation.
In May 2026, Asda announced more than **400 new food and drink lines**, upgrades to fresh produce and frozen categories and price reductions across hundreds of everyday products.
More than 230 new frozen products were introduced as part of the refresh.
The significance is not simply the number of products.
It is the combination of:
**choice + innovation + quality + price.**
This is increasingly what private label is expected to deliver.
Consumers do not want merely a cheaper version.
They want a product that feels relevant, modern and good enough to buy again.
—
# 12. Tesco: retailer-controlled formulation and consumer needs
[Tesco’s 2026 sustainability reporting](https://www.tescoplc.com/media/yjmlhji0/tesco-sustainability-report-2026.pdf?utm_source=chatgpt.com) provides another important example.
Tesco reported that it has expanded the number of additives banned from its own-brand products, with 114 additives covered in the current programme. It also highlighted dietary and lifestyle filters designed to help consumers identify products according to their needs.
This demonstrates another advantage of retailer-owned products.
The retailer can change the specification across its own range.
It does not have to wait for an external manufacturer to decide that a formulation should change.
The retailer can say:
**This is what our customers want. Therefore, this is what our product should become.**
That is product ownership.
—
# 13. The numbers show the transformation
The movement is not limited to four British retailers.
European private-label sales reached approximately **€354.5 billion** in the 52 weeks to July 2024, according to the Private Label Manufacturers Association, an all-time record at the time.
In Britain, own-label has repeatedly reached around half or more of grocery spending.
Kantar reported own-label at **52.3% of grocery sales** in January 2025.
Another Kantar update found supermarkets’ own lines represented **51.2% of sales**, with own-label sales growing 5.9% compared with 5.3% for brands during the period studied.
These numbers tell an important story.
Private label is no longer operating at the edge of the market.
It is operating at the centre.
—
# 14. North America is following the same direction
The transformation is equally significant in the United States.
According to the Private Label Manufacturers Association’s 2026 report, based on Circana data, U.S. store-brand sales reached a record **$282.8 billion in 2025**, an increase of more than $9 billion from 2024.
Store-brand dollar sales increased **3.3%**, compared with 1.2% for national brands.
Unit sales increased 0.6%, while national-brand unit sales declined 0.6%.
The five-year trend is even more revealing.
Between 2021 and 2025, U.S. store-brand dollar revenue increased by **$64.8 billion**, or 30%.
Store brands’ dollar share increased from 19.1% to 21.3%, while unit share increased from 21.6% to 23.5%.
In other words, approximately one in four grocery products purchased in the United States is now a store brand by unit share.
—
# 15. Consumers are not only buying private label—they are saving money
The economic benefit to consumers is substantial.
PLMA estimates that U.S. consumers saved approximately **$35 billion in 2025** by choosing store brands over national brands in regular grocery shopping.
This helps answer the question:
**How can the retailer sell a product more cheaply?**
Because the retailer does not necessarily need to reproduce the entire cost structure of the national-brand model.
The retailer can concentrate resources on:
**product + production + distribution + retail execution + consumer relationship.**
The traditional brand has to spend heavily on:
**product + production + distribution + retail execution + brand building + consumer acquisition + brand maintenance.**
Those are not equivalent cost structures.
—
# 16. The real private-label advantage: removing the “brand tax”
One way to understand the phenomenon is to think about a **brand premium**.
Consumers often pay more for a recognised brand because they believe the brand reduces risk.
The brand communicates:
* quality;
* consistency;
* reputation;
* familiarity;
* status;
* innovation;
* trust.
But what happens when the retailer itself becomes trusted?
Some of that value moves from the manufacturer to the retailer.
The consumer may decide:
> “I know this supermarket. I trust its food. I buy here every week. Why do I need to pay 30% more for the famous name?”
That is the strategic threat facing traditional brands.
The private-label product is not necessarily competing by being inferior.
It can compete by asking whether the **brand premium remains justified**.
—
# 17. Private label is becoming a brand-building exercise
This is perhaps the biggest change of all.
Retailers are no longer simply creating products.
They are creating **brand architectures**.
They can have:
**Value brand**
Products designed to establish a low-price position.
**Core own label**
Everyday products designed to combine quality and value.
**Premium own label**
Products designed to compete directly with premium national brands.
**Specialist ranges**
Organic, healthy, high-protein, vegan, sustainable, regional or functional products.
**Occasion-based ranges**
Christmas, Valentine’s Day, entertaining, restaurant-quality meals and other events.
This allows the retailer to build a portfolio of brands without necessarily owning dozens of separate corporate companies.
—
# 18. Why consumer trust is becoming more important than manufacturer identity
For years, the consumer’s mental model was:
**Manufacturer → brand → retailer → consumer.**
The emerging model is closer to:
**Retailer → product specification → manufacturer → retailer → consumer.**
The manufacturer may be invisible to the consumer.
The retailer is visible.
The retailer takes responsibility for the product.
This gives the retailer a powerful opportunity—but also a significant responsibility.
If quality fails, consumers may blame the retailer.
If a product is excellent, the retailer gets the credit.
That changes the economics of trust.
—
# 19. Private label can actually be more innovative
There is another misconception that private label simply copies brands.
Historically, there was certainly an element of imitation.
But modern private label can increasingly be a source of innovation.
The retailer is close to the consumer.
It can identify emerging trends quickly.
For example:
* higher protein;
* reduced processing;
* healthier formulations;
* new flavours;
* premium meal solutions;
* restaurant-quality food at home;
* sustainability;
* convenience;
* smaller households;
* value-oriented premium products.
The retailer can then brief suppliers to develop products around those trends.
This can sometimes allow private label to move faster than a traditional brand.
—
# 20. What does this mean for manufacturers?
The rise of private label does not mean manufacturers become irrelevant.
Quite the opposite.
The best manufacturers may become even more important.
But their role changes.
Manufacturers need to become excellent at:
* formulation;
* food science;
* manufacturing efficiency;
* quality assurance;
* innovation;
* regulatory compliance;
* packaging technology;
* sourcing;
* sustainability;
* speed to market;
* flexible production.
The manufacturer becomes the **engine behind the retailer’s brand**.
This can be a powerful business model.
A manufacturer does not necessarily need to own the consumer-facing brand if it can become indispensable to several major retailers.
—
# 21. But there is a risk for manufacturers
The danger is commoditisation.
If multiple manufacturers can produce similar products to similar specifications, retailers can potentially move production between suppliers.
The retailer owns the consumer.
The retailer owns the data.
The retailer owns the shelf space.
The retailer owns the private-label brand.
The manufacturer may own only the production capability.
That can create significant negotiating power for retailers.
Manufacturers therefore need to differentiate themselves through capabilities that are difficult to replace.
Technology, innovation, speed, quality, proprietary processes and specialist expertise become increasingly important.
—
# 22. What does this mean for traditional brands?
This is where the challenge becomes much more serious.
A traditional brand cannot simply say:
**“We are more expensive because we are a brand.”**
That argument is becoming weaker.
The consumer increasingly asks:
**What am I getting for the extra money?**
The answer needs to be tangible.
A brand may justify a premium through:
* genuinely superior taste;
* better ingredients;
* patented technology;
* measurable performance;
* stronger sustainability credentials;
* innovation;
* convenience;
* emotional connection;
* heritage;
* specialist expertise;
* superior customer experience.
But “because you know our name” may no longer be enough.
—
# 23. The new competitive equation
The old retail equation was:
**Brand = trust**
The new equation is increasingly:
**Trust + quality + value + availability = choice**
The brand name is only one component.
This is why premium private label is so important.
It allows retailers to compete not just on price but on the other dimensions traditionally controlled by national brands.
The retailer can say:
**You can have quality.**
**You can have innovation.**
**You can have premium packaging.**
**You can have an excellent eating experience.**
**And you can still pay less than the famous brand.**
That is an extremely powerful proposition.
—
# 24. The consumer does not necessarily want the cheapest product
This distinction is critical.
The future of private label is not necessarily about being the cheapest.
It is about being perceived as **the best value**.
There is a huge difference.
Cheap means:
**I paid less.**
Value means:
**I received more for what I paid.**
Retailers increasingly understand this.
The success of premium private-label ranges demonstrates that consumers will pay more for a better product—but they want to believe they are still receiving strong value.
That is why premium own-label products are growing alongside entry-level products.
—
# 25. The “restaurant at home” effect
One of the most interesting developments is the movement of restaurant-quality experiences into the home.
Sainsbury’s has explicitly connected the growth of Taste the Difference with consumers seeking restaurant-quality food at home. Its premium range passed £2 billion in sales as consumers increasingly used supermarket products for occasions traditionally associated with eating out.
This creates a new opportunity.
The supermarket is no longer just selling ingredients.
It is selling:
**experiences.**
Dinner for two.
Weekend entertaining.
Premium breakfast.
Family celebration.
International cuisine.
Restaurant-style meals.
The retailer can capture the entire occasion.
That makes private label far more strategically valuable than simply providing a cheap alternative to a branded product.
—
# 26. The new retail battlefield: quality at an acceptable price
Retail competition is therefore moving towards a very specific battlefield:
**Who can offer the consumer the best combination of quality and price?**
Not the lowest price.
Not necessarily the highest quality.
The best combination.
That is why Tesco, Sainsbury’s, Asda and Waitrose are all investing in different versions of the same proposition:
**better products + strong quality credentials + attractive prices + retailer trust.**
The strategies differ, but the direction is similar.
—
# 27. Private label is becoming the retailer’s intellectual property
The formulation, packaging, product architecture, positioning and customer data collectively create something extremely valuable.
They create a retailer-owned asset.
The retailer can change the product.
It can extend the range.
It can launch premium versions.
It can introduce new flavours.
It can change the pack.
It can adjust the price.
It can use loyalty data to promote the product.
And every successful purchase strengthens the retailer’s own brand.
This creates a flywheel:
**Better product → more consumers try it → greater trust → higher repeat purchase → more data → better products → greater scale → better economics → stronger value → more consumers try it.**
That is the private-label growth engine.
—
# 28. The paradox: private label can be cheaper because the retailer controls more
This brings us back to the original question.
**Why can private label be cheaper?**
Not necessarily because the product is worse.
It can be cheaper because the business model is different.
The retailer can:
* specify the product;
* control the formulation;
* negotiate production;
* purchase at scale;
* control packaging;
* own the distribution;
* use existing stores;
* use existing customer relationships;
* use loyalty data;
* reduce dependence on mass advertising;
* control the retail price;
* manage the entire product portfolio.
In other words:
**The retailer removes costs and layers that may not directly improve the consumer’s experience.**
That is where much of the value comes from.
—
# 29. But “same quality for less” must be handled carefully
There is a danger in oversimplifying the argument.
Not every private-label product is the same as a branded product.
Some are better.
Some are worse.
Some are almost identical in specification.
Some deliberately use different ingredients or processes to achieve a lower price.
The strongest argument is therefore not:
**“Private label is always the same quality.”**
It is:
**“Retailers now have the capability to specify and deliver quality at a price that challenges the traditional brand premium.”**
That is a much more defensible and strategically important proposition.
—
# 30. The threat to brands is structural, not temporary
This is not simply a consequence of inflation.
Cost-of-living pressure has accelerated the movement toward private label, but the underlying structural changes are deeper.
Consumers have tried private label.
They have discovered products they like.
Retailers have improved quality.
Premium ranges have become more sophisticated.
Manufacturers have become better private-label partners.
Retailers have gained more data.
Consumers have become more willing to switch.
Once consumers discover that the cheaper product works just as well for their needs, the psychological barrier to switching can disappear.
That creates a permanent competitive challenge.
—
# 31. The retailer is becoming the new brand owner
The most important conclusion is therefore simple.
**Private label is no longer a retailer’s alternative to brands.**
It is becoming the retailer’s own brand strategy.
The retailer controls the proposition.
The manufacturer provides the industrial capability.
The consumer provides the verdict.
And the price is determined by the retailer’s ability to combine all three.
Sainsbury’s £2 billion Taste the Difference milestone, Waitrose’s investment in lower own-brand prices, Asda’s major product and price refresh and Tesco’s control over own-brand formulation all illustrate different parts of the same transformation.
Across the Atlantic, U.S. store brands reached a record $282.8 billion in 2025, growing almost three times faster than national brands in dollar sales.
The evidence increasingly points in one direction.
—
# Conclusion: Why pay more for the name?
For decades, consumers were taught that the safest choice was the familiar brand.
That relationship is changing.
Today, the retailer can control the formula, the packaging, the specification, the price and increasingly the consumer’s trust.
The manufacturer can produce the product efficiently and at scale.
The retailer can remove unnecessary costs from the consumer proposition.
And the consumer can receive a product that delivers the quality and experience they want—sometimes for significantly less.
The real question facing traditional brands is therefore no longer:
**“Can private label compete with us?”**
The evidence says it can.
The more difficult question is:
**“What does our brand provide that the retailer cannot provide for less?”**
That is the question that will define the next decade of retail.
Because private label is no longer the cheap alternative.
**Private label is becoming the benchmark against which the brand premium must justify itself.**
—
## Key evidence at a glance
| Market / Retailer | Evidence | What it demonstrates |
| —————– | ————————————————————————————– | ——————————————————————————- |
| **Europe** | Private-label sales reached about €354.5bn in the 52 weeks to July 2024 | Private label is a major European market |
| **UK** | Own label reached 52.3% of grocery sales in Kantar’s January 2025 data | Own label is mainstream, not niche |
| **Sainsbury’s** | Taste the Difference surpassed £2bn; 1,200+ new own-brand products launched in 2025/26 | Private label can become a premium consumer brand |
| **Waitrose** | £20m invested in 160+ own-brand price cuts in May 2026 | Premium retailers are competing aggressively on own-brand value |
| **Asda** | 400+ new food and drink lines and 230+ new frozen products in 2026 | Private label/retailer assortment is being used for innovation as well as price |
| **Tesco** | 114 additives covered by its own-brand additive restrictions | Retailers can directly control product specifications |
| **United States** | $282.8bn store-brand sales in 2025 | Private label is growing rapidly in North America |
| **United States** | Store brands grew 3.3% vs 1.2% for national brands | Private label is outperforming traditional brands |
| **United States** | $35bn estimated consumer savings in 2025 | The economic value proposition is substantial |
Sources: PLMA/Circana, Kantar, IGD and retailer disclosures.
### Selected source material
[PLMA — 2026 U.S. Private Label Report](https://www.plma.com/article/2026-private-label-report-2828-billion-sales?utm_source=chatgpt.com)
[PLMA — Store Brand Facts and consumer savings](https://plma.com/about_industry/store_brand_facts?utm_source=chatgpt.com)
[Kantar — UK grocery and own-label data](https://www.kantar.com/uki/inspiration/fmcg/2025-wp-healthier-choices-drive-supermarket-spending-as-new-year-gets-underway?utm_source=chatgpt.com)
[IGD — Premium private label as a UK growth engine](https://www.igd.com/commercial-insight/retail-analysis/trends/articles/premium-private-label-the-battleground-for-growth/72803?utm_source=chatgpt.com)
[Sainsbury’s — Taste the Difference £2bn milestone](https://corporate.sainsburys.co.uk/news/press-releases/sainsbury-s-taste-the-difference-celebrates-2bn-milestone-as-dine-in-deals-drive-valentine-s-day-at-home/?utm_source=chatgpt.com)
[Waitrose — £20m investment in lower own-brand prices](https://www.johnlewispartnership.co.uk/media-centre/latest-news/2026/23897?utm_source=chatgpt.com)
[Asda — 400+ new products and lower prices](https://corporate.asda.com/newsroom/2026/19/05/asda-unveils-new-ranges-lower-prices-and-a-renewed-in-store-experience?utm_source=chatgpt.com)
[Tesco — 2026 sustainability report and own-brand formulation](https://www.tescoplc.com/media/yjmlhji0/tesco-sustainability-report-2026.pdf?utm_source=chatgpt.com)