Signal Consumers tell McKinsey private label is equal or better quality, undercutting the trade-down label

Summary

In a note to its discussion of trading down, McKinsey adds an important qualification about private-label products. Choosing a store brand over a named brand is normally classified as a trade-down move. Yet consumers in McKinsey's research frequently say they regard these products as matching or exceeding the quality of comparable branded goods. That undercuts the assumption that such a switch means accepting something inferior. It also suggests that some of what is measured as trading down may reflect genuine preference rather than compromise. For branded manufacturers, this points to a more durable competitive threat from retailers' own lines.