Even high earners are spending more on private-label goods. Here’s why.

The Ipsos Consumer Tracker asks Americans questions about culture, the economy and the forces that shape our lives. Here's one thing we learned this week.

In recent months, the Ipsos Consumer Tracker has asked thousands of Americans about an economic issue near and dear to their hearts (and wallets): the cost of groceries. 

By now, it should come as no surprise that Americans say they’re spending more at the supermarket. As Ipsos’ Matt Carmichael observed in September: “Just over half of people said they are spending more money on groceries than even the start of the year, when prices had already inflated.” Critically, almost no one says they’re spending less. 

This all serves to explain one trend: that many Americans are spending more on private-label goods (AKA generic products). Traditionally, these undercut the pricing of brand names, offering frugal shoppers a chance to stretch their budgets and making them well-suited to those hardest hit by inflation.  

What’s somewhat more surprising, then, is that about a third of high-earning Americans also say they’re spending more on private-label products.

“Private brands are broadly appealing across income levels and other demographics, and interest has grown substantially since the start of the year, pushing sales to an all-time high,” said Wendy Wallner, EVP and Client Officer, Retail and Restaurant Sectors at Ipsos. 

Indeed, in mid-September, 33% of Americans with a household income of $100k+ and those earning $125k+  said they were increasing their spending on private label. That means that high earners are increasing their spending on private-label products at nearly the same rate as those earning $50 to $100k (37%) and exactly the same rate as those earning under $50k. Meanwhile, only single-digit percentages of high earners said they “didn’t tend” to buy private label.

This offers evidence for two interconnected premises: first, that higher-income Americans see the value of private-label products. And second, that even Americans in high tax brackets are shopping with value in mind. (Another signal: in August, 24% of Americans with a household income of $125k+ said they were couponing more). 

Still, the rise of private label spending isn’t attributable to economics alone. 

“This is likely driven not just by consumer cost savings efforts in an inflationary environment, but by the heavy investment retailers are making to diversify their lines and meet a variety of shopper needs while upping product quality,” Wallner said. 

Which means that at a time when Americans of all backgrounds say they’re eating out less and cooking or making meals at home more, retailers and private-label brands have a real opportunity to build brand loyalty and reshape consumer behavior. 

“Private brands no longer strive to be at parity performance versus national brands; they strive to deliver against needs in new, differentiated ways. As a result, they have become trusted brands to a broad range of consumers, and not just a way to temporarily drive down household expenses.” 

For more on growth in the private label space, look out for What the Future: Food, launching next week. Sign up for our newsletter to stay in the loop. 

More insights from this wave of the Ipsos Consumer Tracker:

It's not just higher prices driving increased grocery spend

It’s already holiday shopping time for the early birds

We think we know about sweeteners, but do we?

The Ipsos Care-o-Meter: What does America know about vs. what does America care about?