[Analysis] Private labels: What are the best practices of European retailers in 2023? 

Although European countries have historically been among the largest private label markets in the world, 2022 and Q1 2023 have seen a major shift towards private labels in most markets. Private labels have become a major P&L lever for retailers, as is the case with Mercadona, which derives more than 70% of business from private labels. mind Retail has identified 4 examples of strategic developments in the food sector.

Through Sophie Baqué. Published on 22 May 2023 à 13h43 - Update on 15 June 2023 à 14h31

After years of stagnation for private labels, particularly in France, inflation created a turnaround effect for this market. According to NielsenIQ, which surveyed 17 markets for PLMA’s International Private Label Yearbook, private labels have risen from 35.8% of value food sales in Europe in 2021 to 37% in 2022 (+ 1.2 point in one year). Their market share increased in 16 of the 17 countries surveyed, the only exception being Switzerland, the leading country in Europe in terms of private label weight, where they declined slightly. 11 countries maintained their market share well above 30%, and 4 markets remained above 40%. By comparison, in the U.S.A., private label’s value market share is only 20%. 

Switzerland, Netherlands, Spain, UK and Germany: private labels between 40% and 52% of the market

At the end of 2022, Switzerland was still the most advanced country in Europe, with a 52% market share by value for own brands. This market is driven by retailers such as Migros and Coop. It is the only country where private labels account for more than 50% of FMCG sales. The U.K., the Netherlands and Spain follow at around 43%, while Germany and Portugal are close to 40%. France, with around 32% market share, ended the year at the same level as Poland.

For Spain and Germany, growth was 3 to 5 times higher than national brands last year. “Private labels are growing strongly where they are already well established”, Emily Mayer, Business Insights Manager at Circana (formerly IRI) told mind Retail. “Where they have already gained legitimacy with consumers, the question of carry-over is less of an issue”. If this shift towards own brands is transversal to all countries, it is particularly strong in Spain and in Germany.

Source : NielsenIQ,…

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