Gen Z and Millennials’ interest in private label is more pronounced than ever, but what does that mean for retailers? As Gen Z enters its prime spending years amid inflation and economic uncertainty, many are reconsidering the national brands they grew up with. Their shopping behaviors reflect their digital fluency, environmental consciousness, and commitment to value and authenticity. Increasingly, they are turning to store brands not only for affordability but also for transparency and ethical business practices. Private label brands have captured this audience’s attention by offering cost-effective alternatives across these key categories. With younger Millennials and Gen Z shoppers leading the charge in trying store brands, private label shopping has become routine, setting the stage for continued growth in this sector. 

Why Gen Z and Millennials Are Interested in Private Label 

1. Economic Factors Fueling Private Label Adoption 

Economic uncertainty and inflation are driving younger consumers toward private label brands for affordability and quality. Many use buy now, pay-later (BNPL) services to cover essentials – such as food, household products, and personal care goods – avoiding high credit card interest rates while managing their budgets. Private label products, viewed as stylish, cost-effective, and comparable to national brands, have become their preferred choice. Food inflation (25% in four years) has accelerated store-brand adoption, with 41% of shoppers increasing their private label purchases. Millennials, facing financial instability, and Gen Z, raised in economic uncertainty, prioritize value and transparency in their shopping habits. According to the Bazaarvoice Shopper Preference Report 2025, 76% of shoppers favor private label products for lower pricing, while 23% consider sustainability a factor, marking a lasting shift in retail preferences. 

2. Shifting Consumer Perceptions of Private Label 

Younger consumers increasingly view store brands as equal to national brands in terms of quality and value, fueling the continued expansion of private label products. No longer seen as a compromise, store brands have become bold personal statements, particularly for Gen Z, who take pride in choosing affordability without sacrificing style or quality. This shift aligns with their desire for elevated experiences and egalitarian quality, proving that private label products can be just as good as premium brands. 

Private label sales reflect this evolving mindset, rising 4% to a record $271 billion last year, while unit sales have grown over 2% since 2021, as national brands declined by nearly 7%. Awareness and loyalty are strong – 67% of shoppers actively recognize store brands at their favorite grocery stores, and 64% frequently purchase them during regular trips. For Gen Z, affordability is key, but their loyalty stems from reliability, trust, and previous positive experiences, reinforcing that private label products are not just budget-friendly alternatives but preferred choices in modern retail. 

3. Sustainability and Ethical Considerations 

Gen Z and Millennials are reshaping retail by demanding that brands align with their values, particularly in sustainability and ethical business practices. These younger consumers prioritize environmentally responsible sourcing, production, and packaging, making private label brands an appealing choice when they demonstrate a commitment to sustainability. For Gen Z, store brands aren’t just about affordability—they’re a reflection of their identity, a way to support ethical business models while still maintaining a sense of style. Transparency is key, as this generation expects brands to openly share details about their ingredients, sourcing, and production methods, reinforcing trust and credibility. 

Social responsibility plays a crucial role in purchasing decisions, with 82% of Gen Z consumers more likely to buy from brands that advocate for social equality. Millennials, meanwhile, emphasize ethical treatment of employees, with 81% considering workforce respect a top priority when choosing where to shop. Brands that align with charitable organizations and prioritize environmental stewardship stand out in this competitive market, as consumers increasingly base their loyalty on how companies operate behind the scenes. This decisive shift toward values-driven brand relationships signals that private-label companies embracing sustainability and ethical transparency will continue to thrive. 

4. The Role of Digital and Social Media in Private Label Growth 

Gen Z’s digital-first shopping habits are shaping private label marketing strategies, with social media playing a crucial role in influencing purchasing behaviors. TikTok has surpassed Google as the starting point for 43% of Gen Z’s product searches, highlighting the platform’s influence. Viral discussions, such as those around shrinkflation, amplify concerns about national brands and drive engagement with private label alternatives as consumers reveal their private label “dupe” discoveries on platforms like TikTok and RedditDespite their online presence, Gen Z still enjoys brick-and-mortar shopping, with 74% of grocery purchases made in-store, a preference linked to retail therapy and avoiding delivery fees. 

Social media remains a primary tool for product discovery, yet only 18% of Gen Z shoppers engage directly with brands, signaling that metrics like view counts may be more valuable than likes or shares. Influencer recommendations shape brand relationships for 22% of Gen Z shoppers, reinforcing the importance of influencer partnerships in private label marketing. While direct digital purchases are evenly split between Gen Z and Millennials, omnichannel strategies that integrate in-store experiences, social media, and digital platforms are essential for capturing this consumer base’s attention and fostering brand loyalty. 

How Retailers are Responding 

Retailers are rapidly expanding their private label offerings to meet growing consumer demand, recognizing that store brands are no longer just budget-friendly alternatives but preferred choices. Investments in R&D have elevated private label products to match national brands in quality, flavor, and aesthetics, attracting younger shoppers who value both affordability and authenticity.  

Retailers such as Target (with its “Good & Gather” food line), Amazon (with its “AmazonBasics” range), Trader Joe’s, and Lidl have successfully tapped into this trend, offering store-brand products that align with Gen Z’s preference for individuality and ethical consumerism. 42% of Gen Zer’s consider store brand reputation extremely important, and 30% want these brands to reflect their personal values, reinforcing the need for brands to embrace sustainability and innovation. Loyalty programs have further driven private label adoption, with nearly two-thirds of North American shoppers switching from national brands to private label options due to rewards. As businesses continue to refine their offerings, private label products are evolving into a powerful retail strategy, shaping the future of consumer preferences. 

What’s Next? 

As Gen Z’s spending power continues to rise—projected to reach $12 trillion by 2030—their distinct preferences are reshaping competition between private label and national brands. Store brands now have a unique opportunity for innovation, engagement, and loyalty, offering Gen Z the reliability and financial stability they seek in an uncertain world. Retailers must recognize that this generation’s connection to brands is deeply personal – 84% recommend brands they trust to family and friends, emphasizing the importance of reputation, authenticity, and shared values. 

To remain competitive, national brands must reinvent themselves through distinctive packaging, unique flavors, and sustainability, while exploring joint ventures with retailers to develop exclusive product lines that resonate with younger shoppers. Personalized communication and free trials are key strategies, as nearly cite them as important factors in brand adoption. As private label brands continue their rapid growth, success in this evolving retail landscape will depend on businesses aligning with younger consumer’s values, delivering quality, and fostering meaningful connections that drive long-term loyalty. 

Clarkston’s retail experts can help you at any stage of the development process, from producing MVP functionality to stakeholder management. To learn more about how Clarkston helps retail companies tackle their biggest challenges, contact us today.