As shoppers have turned to cheaper alternatives to beat inflation, retailers from CVS to Target and Walmart have invested heavily in their private-label brands over the past year, wrapping store-branded products in new design-forward packaging. A new report finds that retailers efforts have paid off.Private-label goods accounted for one in every four food and nonfood grocery products purchased in the U.S. last year, according to a report from thePrivate Label Manufacturers Association (PLMA), which also found that sales of private-label products in the U.S. topped $270 billion in 2024, a record.Once purposefully packaged with no frills to convey their low price, retailers private-label products have gone from generic discount off-brands to colorfully packaged, beloved brands in their own right designed to appeal to a wider consumer base and higher-income shoppers.[Photo: Target]Target, a leader in the private-label space, recently updated its Up&Up brand to more colorful packaging courtesy of the design agency Collins.Its a brand thats been around for a long time, has lots and lots of items, but it needed a refresh, Rick Gomez, Targets chief commercial officer, said on the companys most recent earnings call. And so we went in and invested in the brand, redesigned all the packaging graphics, took about 40% of the line and did product improvements, new fragrances, more sustainable packaging.To Gomez, it was a no-brainer. Thats what we think you need to do to keep brands contemporary and relevant, he said.[Image: Walmart]Competitors have taken notice. Late last year Walmart introduced Bettergoods, a private-label brand with bright, color-on-color packaging; product offerings include plant-based, organic, and gluten-free food meant to appeal to the high-income shoppers whove increasingly turned to Walmart since inflation spiked. Walmart said last year that high-income shoppers represented the majority of its share gains, telling Fast Company that the Bettergoods brand had a high repurchase rate. CVSs private-label brand, Well Market, also launched last year and showed the trend extends to pharmacies too.[Image: CVS]While national brands accounted for more sales overall in 2024$1.3 trillion compared to more than $270 billion sold in store-brand products, according to the PLMA reportthe growth of private-label products has proven key for retailers aiming to lure customers into their stores. Sales of store-brand products in the U.S. rose nearly 4% from 2023 to 2024, while sales of national brands grew just 1% in the same time period, according to the report.Once viewed as cheap knockoffs, private-label brands have become mainstays for consumers and retailers alike.