The Rise of Private Labels: How Retail Giants Are Winning the Game

Walmart just hit $200 billion. Aldi is at $97 billion. Costco does $82 billion.

But these aren’t total sales.

This is just how much these giants make from selling their private-label products. And this isn’t your grandpa’s discount line anymore—it’s a full-fledged strategy reshaping global retail, a success story that promises a bright future for the industry.

From grocery stores in India to international retail giants, private labels are dominating the shelves. Let’s dive into how this trend took off and why it’s the future of retail.

1. The Early Days: The First Private Labels

1.1 The American Beginning

Rewind to the early 1900s, when retail was a primarily local business. Even big names like Safeway and Kroger lacked the national muscle to sell their brands.

Then Sears changed the game. Using its market influence, Sears started paying manufacturers to create exclusive brands like Craftsman (tools) and Kenmore (appliances). The concept was simple: offer quality products at lower prices than big national brands.

Shoppers loved it. And soon, competitors started paying attention.

1.2 The Indian Parallel: Tata and Reliance

In India, private-label brands are now a common strategy across major retail chains. Companies have introduced exclusive in-house brands to differentiate themselves and capture consumer trust.

Today, nearly every major retailer operates private labels across different categories:

• Shoppers Stop – Stop (fashion), Arcelia (beauty)
• Lifestyle – Code (fashion), Fame Forever (casual wear)
• Reliance Retail – the network of grocery and apparel brands
• D-Mart – house brands in staples and household goods
• Amazon India – Solimo (home essentials), Basics (clothing)

This strategy has allowed retailers to offer quality alternatives to national brands while keeping their profit margins high, ensuring consumers get the best value.

2. Sam Walton Takes Notice

Over in Bentonville, Arkansas, Sam Walton saw an opportunity. With Walmart’s immense purchasing power, he modified the Sears playbook and elevated it to a new level.

Walmart started producing private-label brands like Ol’ Roy (dog food) and Sam’s Choice (groceries). This strategy helped Walmart dominate retail, offering products at unbeatable prices while keeping more profit.

2.1 The Global Effect: D-Mart and Big Basket in India

Inspired by these tactics, Indian retailers like D-Mart and Big Basket launched their private-label brands. D-Mart, for example, introduced in-house brands for staple foods and household goods, offering better value than national brands.

Big Basket built a successful range of private-label products under names like Tasties (snacks) and Fresho (bakery and fresh). These store brands not only captured consumer loyalty but also boosted profit margins.

3. Why Private Labels Work

Retailers and consumers benefit from private labels. Here’s why:

3.1. Control Over Shelf Space

Retailers control their aisles, which means they can prioritise their brands. Want Coke? You’ll see Big K Cola right next to it in Kroger stores. Looking for Tropicana? Walmart’s Great Value Orange Juice is within reach.

3.2. Higher Profit Margins

Private-label products don’t require massive marketing budgets. Big brands spend billions on advertising, but retailers can put their products in prime spots and let customers choose, resulting in fatter margins.

3.3. The Manufacturer Secret

Here’s a little-known fact: many private-label products are made by the same manufacturers producing big brands. For instance:

• Costco’s Kirkland Signature batteries? Made by Duracell.
• India’s Big Bazaar Tasty Treat biscuits? Produced by some of the same factories that make national brands.

Big brands are happy to manufacture private labels for retailers because it guarantees them revenue—even if the products compete with their own.

4. Power Players: Who’s Winning the Private-Label Game?

4.1. The US Giants

• Walmart’s Great Value brand generates over $30 billion annually—just one of its 300+ private labels.
• Target has over 50 in-house brands, with 10 pulling in over $1 billion each.
• Costco’s Kirkland Signature did $82 billion in sales last year, making it one of the largest brands in the world.

4.2. The Indian Heavyweights

• Reliance Retail’s private labels in groceries and clothing are thriving, thanks to its aggressive pricing.
• D-Mart’s house brands in staples and FMCG are gaining a stronghold in middle-class households.
• Amazon India’s Solimo and Basics brands offer everything from home essentials to clothing, quietly taking market share from national brands.

4.3. The European Powerhouses

• Aldi and Lidl, the German discount chains, built their business entirely on private labels. Their in-house brands account for over 90% of their sales.
• The UK’s Tesco, Sainsbury’s, and Marks & Spencer are investing heavily in premium private labels to compete with established FMCG brands.

5. The Future of Private Labels

Consumers love private-label products, often without even realising it.

5.1 The Data Speaks

• Walmart’s Great Value brand has been purchased by 82% of Americans.
• Private-label sales in online marketplaces like Big Basket and Amazon are skyrocketing in India.
• Globally, private-label sales are growing at twice the rate of branded goods.

What’s Next?

Retailers are no longer treating private labels as generic discount alternatives. Instead, they’re creating premium store brands to compete with established names.

For example:

• Amazon India’s Presto! Offers high-quality home cleaning products.
• Target’s Good & Gather competes with premium organic food brands.
• D-Mart’s Healthy Alternatives caters to the health-conscious Indian consumer.

Conclusion

Private labels are not just about affordability—they’re about innovative branding, consumer trust, and high-quality alternatives to big brands. Whether you’re shopping at a Walmart in Texas, a Reliance Smart store in Mumbai, or an Aldi in Berlin, likely, you’re effortlessly adding private-label products to your cart.

As the trend grows, one thing is clear: the future of retail belongs to those who own the shelf, control the supply chain, and build trust through their brands.