Amazon’s new budget grocery brand shows US shoppers are still struggling

Recent gains at Walmart and Target have been bright spots in an otherwise challenging consumer landscape, but weaker results at dollar stores indicate that lower-income households, in particular, are not in great financial shape.

And while government data showed inflation continued to cool in August, many key prices remain high as increases over the past two years remain stuck.

In other words, while the picture isn’t getting significantly worse for American shoppers, it’s not exactly getting better quickly.

Amazon’s new “no-price brand,” Amazon Saver, taps into a trend that Target recently tapped into with its Dealworthy product line, while Walmart’s longtime Great Value brand is bought by 86 percent of households, according to Numerator data.

About a quarter of shoppers surveyed by the Numerator say they buy store brands as a way to save money.

Private label food products have been a source of relief for customers as retailers have been able to lower prices more quickly compared to national brands. However, big names are paying attention – PepsiCo recently admitted that the company’s bottom line may have gone a little too far.

Still, the clock is ticking for more substantial fixes.

Dollar General CEO Ted Vasos said about 30 percent of respondents to a company survey have tapped at least one credit card, while 25 percent expect to miss paying a bill in the next six months.

“Most of them say they feel worse financially than they did six months ago,” he said.

Prime members (who can afford the monthly fee) can find welcome news about Amazon’s moves. But retailers and customers will continue to have to make more room on their shelves for private labels until the economic picture improves.