Wal-Mart, Target and Costco Shine as Private Labels Challenge National Brands

Last Updated Sep 2, 2009 11:58 PM EDT

Store brands aren't going to be pushed around anymore, not after a study by consumer reports puts them in a virtual â€" and sometimes literal -- tie with national brands in their ability to deliver flavor.

In a blind taste test, Consumer Reports lined up private label and national brand products in 29 categories. National Brands did prevail in six categories but store brands came out ahead in four and, perhaps most surprising, tied in 19.

While lower prices might be the initial temptation that gets shoppers to consider private labels, Consumer Reports tasters preferred the flavor of Archer Farms Chewy Soft Baked cookies from Target, Kirkland Signature Organic Medium Salsa from Costco and Great Value Whipped Topping from Wal-Mart to similar products from national brand manufacturers. In fact, Wal-Mart had two winners with its Great Value brand, as its au gratin potatoes also prevailed in a head to head test. And Great Value tied in the frozen lasagna category. Besides its big win, Target's Archer Farms earned a tie in frozen pepperoni pizza segment but lost in the dried cranberry category to Ocean Spray's Craisins. Yet, in what must be especially gratifying for the folks responsible for the label, the retailer's bargain Market Pantry brand came in level with Duncan Hines in brownies. The other private label winner, Costco's well-regarded Kirkland Signature brand, had three ties besides its win, in frozen strawberries, vanilla extract and boxed chocolate.

While success in the test reaffirms Kirkland's status as a premier private label, and certainly will be welcomed at Costco, the publicity their standing in the Consumer Reports study generates comes at a particularly good time for Wal-Mart and Target. The strong showing for the recently relaunched and expanded Great Value label gives consumers another reason to turn to Wal-Mart in the recession and, perhaps even more critically, provides another reason for them to keep shopping as recovery takes hold. For Target, the result for its private labels should be a confidence builder. Private labels are a big part of its recent food operations expansion and now have received a nod from a respected consumer watchdog, which certainly boosts the status of the retailer's edibles efforts.

National brands did prevail in a number of categories with KC Masterpiece Original barbeque sauce, Oscar Mayer precooked bacon, Quaker Natural Granola Oats, Honey & Raisins cereal and Kellogg's Pop Tarts joining with Ocean Spray Craisins as winners of their respective categories.

Other store brands managing ties included Kroger, Eating Right from Safeway and GreenWise Market from Publix. America's Choice from A&P and 365 from Whole Foods each had a pair of dead heats.