In the 1980s, even into the 1990s, house brands usually meant cheaper but inferior products. Companies saved money not only on packaging and marketing, but also on the quality of goods being sold.
Costco was a big part of changing that when it consolidated several house brands under the Kirkland Signature name in 1995. That was a charge led by Costco founder Jim Sinegal.
“We found that there was a resurgence of private-label product, and that was driven an awful lot by the fact that the prices of brand-name products were growing so rapidly,” Sinegal said at a talk in 2019 at Georgetown University. Rising prices for big-name brands “created an umbrella” for Costco to develop its own brands at 15% to 20% below the price of branded alternatives.
Using a single brand for all house labels isn’t uniform. Target still has dozens of in-house brands. But it has become common, and Walmart’s Sam’s Club uses one name, Member’s Mark, for all its house brand products.
Sam’s Club has recently made some major changes to Member’s Mark.
Sam’s Club completes a long journey
Sam’s Club launched a major initiative for Member’s Mark back in 2022 around how the chain approaches its food and beverage products.
“We decided to remove over 40 ingredients, including certified synthetic colors, artificial flavors, aspartame, and high-fructose corn syrup, without ever compromising on the taste or value our members expect,” Sam’s Club Chief Merchant Julie Barber wrote on the company’s website.
That standard has been met, and all Member’s Mark food and beverage products shipping to the chain’s warehouse clubs now meet its “Made Without Commitment” standards.
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Some changes to products were subtle, including using a packaging change so the chain’s sports drink still looks blue in the bottle. In other cases, harder decisions had to be made.
“Sometimes, a product simply couldn’t be reformulated to meet our standards without losing what made it popular. Rather than compromise our commitment, we chose to remove the item from our assortment,” Barber wrote.
Sam’s Club is not alone
While Walmart’s efforts predate the current White House administration, some companies are making changes after Health Secretary Robert F. Kennedy Jr. laid out plans to remove synthetic food dyes from the U.S. food supply, as Reuters reported.
- W.K. Kellogg is reformulating its cereals served in schools to not include artificial dyes, and has said it would not launch any products with the dyes beginning next year.
- Tyson Foods is also “proactively reformulating” food products containing petroleum-based synthetic dyes, which, according to the company, were to be eliminated from its production process by the end of May.
Source: Reuters
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Costco set the standard
Costco has led the way, but Sam’s Club has not been far behind.
“Kirkland is a proxy brand for Costco. It really means Costco,” Christopher Durham, president of Retail Brands Institute, a trade group representing the private brand industry told WRAL. “Kirkland is designed to appeal across demographic groups.”
In my personal experience shopping at both Sam’s Club and Costco, I’ve found that Member’s Mark and Kirkland Signature often deliver similar quality at a better value than comparable name brands.
Both Costco’s and Sam’s Clubs’ house brands have a reputation for quality.
- 73% of Costco shoppers say they prefer Kirkland Signature to name brands in many categories.
- Sam’s Club’s Member’s Mark covers more than 600 products, compared to roughly 300 items under Costco’s Kirkland Signature label.
- Both house brands make up a large share of club store sales, with Member’s Mark representing around 30% of Sam’s Club annual sales and Kirkland about 28% of Costco’s.
Source: Groupon survey
“One thing I really want to emphasize here is that, no matter which brand you chose, you’re probably doing right by your budget either way compared to buying name-brand products,” according to an article from The Motley Fool, which extensively compared the paper products sold by both warehouse clubs’ brands.
“Even when buying them from Costco or Sam’s Club, your Bounty, Charmin, and Kleenex is going to cost more for the same — or sometimes even inferior — quality.”
Consumers support private-label brands
Data from Numerator showed that Americans have embraced private label/house brands like Member’s Mark and Kirkland Signature. Numerator tracks verified U.S. household purchasing behavior using receipt-level data from millions of consumers across grocery, mass, club, and online retailers.
- Private labels’ presence is ubiquitous across U.S. households. In 2024, household penetration was highest for the grocery (99.9%), health & beauty (99.2%), household (98.9%), home & garden (98.0%), and tools & home improvement (86.3%) sectors. Over three-quarters of U.S. households also purchased apparel (84.8%), party & occasions (82.9%), and office (79.7%) private-label products.
- Private-label sales had been outpacing national brands for the past five years. In 2020, private-label sales grew 29% (versus 15.4% for national brands). In 2022, private-label sales grew by 6.9% (versus 3.6%), and in 2024, private-label sales grew by 2.3% (versus 4.5%).
After several years of outsized gains, private-label growth slowed in 2024 as national brands rebounded, though private labels maintained historically high household penetration.
Related: Costco reveals major investment to enhance member experience
