Europe's private labels: a growing force in retail
In the latest update of PLMA’s International Private Label Yearbook for the first half of 2024, the data shows thriving private label market shares across 17 European countries, as reported by NielsenIQ.
The overall private label share has experienced growth, reaching 38.6% based on the data of the first half of 2024, marking a 0.5% increase compared to the first half of 2023. NielsenIQ's survey indicates a notable increase in retail brands across 16 out of the 17 countries analyzed, with Switzerland being the sole exception, witnessing a slight decline in private label share.
Europe continues to assert its dominance in the global private label market, with 11 markets maintaining a market share above 30%, and 6 markets surpassing the 40% threshold. Noteworthy growth in private label share has been observed in Portugal (+1.7%), Spain (+1.5%), France (+1.1%) and Czechia (+0.7%). Despite a decline, Switzerland retains its position as the country with the highest share across the 17 countries, standing at 52.3% (-0.1% compared to the previous year).
The collective private label share of Europe's largest markets - Germany, the United Kingdom, and France - stands at 40.4%, marking a 0,5% increase from the previous year. Significant growth has been witnessed in categories such as Ambient Food and Frozen Food, these categories grew over 1% in share.
Spain and Portugal have experienced notable share growth in Private Label by 1,5%, particularly in frozen food (+2.3%). However, the healthcare category in these countries has seen a decline in share.
Belgium and The Netherlands have witnessed a slight increase of 0.1% in private label share, however, growth can be observed in ambient food, healthcare and alcoholic beverages.
Scandinavian countries collectively experienced a growth of 0.4% in private label share, with health care showing the highest growth (+2.3%), while alcoholic beverages witnessed a slight decline (-0.2%).
In Eastern Europe, private label share is on the rise by +0.6%, with the highest grown particularly in perishable food and paper products.
NielsenIQ's data indicates that perishable & frozen foods, confectionery & snacks, and ambient food are the top three categories in terms of private label value share, accounting for an average of 47.8%, representing a total of 260 billion euros across the 17 European countries tracked. Overall private label sales across these countries have grown by 20 billion euros.
Private label products encompass all merchandise sold under a retailer's brand. That brand can be the retailer's own name or a name created exclusively by that retailer. In some cases, a retailer may belong to a wholesale group that owns the brands that are available to only the members of the group.
Major supermarkets, hypermarkets, drug stores and discounters offer products under the retailer's brand. Private label covers lines of fresh, canned, frozen, and dry foods; snacks, ethnic specialties, pet foods, health and beauty, over-the-counter drugs, cosmetics, household and laundry products, DIY, lawn and garden, paints, hardware, auto care.
For the consumer, private label represents the choice and opportunity to regularly purchase quality food and non-food products at savings compared to manufacturer brands, without waiting for promotional pricing.
Private label items consist of the same or better ingredients than the manufacturer brands, and because the retailer's name or symbol is on the package, the consumer is assured that the product meets the retailer's quality standards and specifications.
Manufacturers of private label products fall into three classifications:
• Large manufacturers who produce both their own brands and private label products.
• Small and medium size manufacturers that specialise in product lines and concentrate on producing private label almost exclusively.
• Major retailers and wholesalers that operate their own manufacturing plants and provide private label products for their stores.