The study from IRI, which covers eight Western markets (UK, France, Germany, Greece, Italy, Spain, Netherlands and the US), comes just days after two of Europe’s biggest supermarket chains announced a strategic alliance for the sourcing of private label goods.
UK-based Tesco and French multinational Carrefour – both mid-priced retailers challenged by the continued rise of discount supermarkets – said the deal would enable both businesses to offer customers better quality and choice, at lower prices.
The experiences of the two countries differed markedly in the IRI research, however: private label value share is highest and growing most in the UK (52.5%), but France was one of only two countries (the other was Greece) to see value share decline, in its case by 0.7 percentage points.
Spain (42.6%) and Germany (40.1%) also boast high shares for private label, while the lowest were to seen in Italy (18.1%) and Greece (16.3%).
The study highlighted the evolution of private label to ‘private brand’ in several markets, as retailers strike a new balance between price and quality at the premium end of categories such as chilled ready meals, healthy snacking and affordable facial cosmetics.
Further, there has been a broadening of the retail landscape as discounters have been joined by online giants like Amazon and Google which are expanding their FMCG footprint and “creating a platform ripe for further private label expansion”.
Olly Abotorabi, Senior Regional Insights Manager at IRI, observed how “products are increasingly aligned to evolved shopper habits and virtues whether that’s health, indulgence, portability, sustainability or environmental issues”.
But he added that “premiumisation and heavy persistent promotional activity from brands is helping them maintain value share”.
Overall, private label share was highest in the frozen (47.1%) and chilled & fresh (44.8%) food categories.
Premium and organic private label performed especially well in France (+11.2%) and Italy (+10.8%) where these now represent 11% and 17% respectively of total private label in those countries.
Sourced from IRI; additional content by WARC staff