COVID-19 Makes Private Labelers Like Kroger, Costco Big Winners
The COVID-19 pandemic has rattled consumers for obvious reasons, not the least of which is forcing them to do more of their shopping online. The Food Marketing Institute suggests 21% of consumers tried online grocery shopping for the first time in the wake of the pandemic, and adds that 19% of them have stuck with the approach even though stores have reopened in the meantime. Shoppers already ordering groceries online did more of it this year too, and both groups are ultimately expected to double online shopping's share of the U.S. grocery market by 2025, according to an outlook from Mercatus and market research company Incisiv.
The coronavirus contagion, however, is also prompting less obvious changes in consumer behavior. Perhaps chief among them is a new affinity for private label consumer goods like Costco's (NASDAQ: COST) Kirkland Signature brand or Kroger's (NYSE: KR) Simple Truth. Forced by a limited availability of rival products as well as cost concerns, consumers gave these alternatives a shot. Surprise! They like them well enough that many consumers intend to continue buying these goods even when they no longer have to. This translates into an edge for a couple of these store chains.
Image source: Getty Images.
Source Fool.com
