Why U.S. Grocery Chains Need More (and Better) Store-Brand Products

The U.S. grocery industry has reached an uncertain crossroads, facing competition from many sources, but especially German discount stores ALDI and LIDL, who are aggressively expanding across the United States. Whether U.S. retailers will maintain their market share hinges on how they use private-label products (also called white-label goods or store brands) to fight back. In France, grocers were able to repel ALDI and LIDL by offering private-label goods that were both affordable and high quality, but in the UK, retailers chose to offer super-budget private-label items. They might have been cheap, but they were very low-quality, and consumers punished them. The U.S. doesn’t have a lot of experience with private-label goods, so American retailers will have to come up to speed quickly if they hope to maintain their advantage.