Private label in Australia has crossed $46 billion in annual sales with 4.8% year-on-year growth. Own-brand products now hold 18.1% of all retail dollar sales and nearly 40% of unit share. Both Coles and Woolworths are expanding home-brand portfolios and shelf allocation aggressively.
But the demographic shift is the real story. Gen Z's share of private-label spending is projected to surpass Baby Boomers by mid-2026. They are allocating 18.4% of their grocery wallet to store brands. Not because they cannot afford the alternative. Because they do not see a reason to pay more.
That distinction matters for every brand marketer paying a premium for shelf space.
Why it matters
The old narrative was that private label wins on price during downturns and loses share when confidence returns. That narrative is dead. Gen Z is not choosing home brand because of cost-of-living pressure alone. They are choosing it because the quality gap has closed, the packaging looks good, and brand loyalty means nothing to a generation that has never experienced brand scarcity.
Annual private label sales in Australia with 4.8% year-on-year growth
For FMCG brand marketers, this is not a pricing problem. It is a relevance problem. When your target demographic sees zero difference between your $8 product and the $4.50 home brand next to it, the problem is not their perception. The problem is your differentiation.
Coles and Woolworths are not just competing on price anymore. They are investing in premium private-label tiers, sustainability claims and packaging design that matches or exceeds the branded equivalent. The AMI reports that private labels have moved from "copying product" to "lifting the whole playbook and innovating harder."
What to do about it
If you market a consumer brand in Australian grocery, audit your shelf position against the home-brand equivalent this week. Compare packaging quality, ingredient lists, sustainability claims and price gaps. If the only remaining differentiator is your media spend, you have a brand equity problem, not a marketing one. Invest in genuine product differentiation, community, story or provenance that a retailer cannot replicate at scale. The brands that survive the private-label expansion will be the ones that give consumers a reason to pay more that has nothing to do with awareness.
