Revenue from Target’s private labels, from Cat & Jack kidswear to Good & Gather food, has tripled in the past decade to more than $30 billion.
The enterprises bundled together would rank fifth among Minnesota’s public companies, ahead of U.S. Bancorp and 3M, and 144th on this year’s Fortune 500 list.
The strength for Target and other retailers, especially in the grocery sphere, is the result of a shift in consumer shopping habits since the pandemic. Think Kirkland at Costco and Trader Joe’s.
As inflation rose, shoppers turned to private labels, previously known as store brands or generic.
Private-label growth is the major reason Target leads the nation in trademark applications. Competitors, with their own private labels, also rank high on the list.
“There’s been a long-term change in buyer behavior toward greater acceptance of private labels because people were forced to try them and found out it worked really well,” said Mark Bergen, a marketing professor at the University of Minnesota who studies pricing strategies and private labels.
Preferences have changed
In 2024, private-label sales increased almost 4%, reaching $271 billion, according to Circana. Retailers are paying attention.
Cub Foods recently surveyed customers and found nearly 4 out of 5 Minnesotans — and 87% of Cub shoppers — sometimes prefer private brand over name brand for the taste, the locally based subsidiary of United Natural Foods Inc. said.