A study by market intelligence firm IRI has found that the value market share of private label has fallen by 0.6 percentage points year on year in Europe (encompassing France, Germany, Italy, Spain, the Netherlands and the United Kingdom), the US and Australia.
The study, Private Label in Western Economies, found that the UK is the market with the strongest penetration of private label (51.8 per cent), however the value share of the market has been down year on year, by 0.4 points.
In Germany, too, private label is decreasing (-0.8 point in value share), although it remains high, with a value market share and a unit market share of 38.4 per cent and 50.9 per cent, respectively.
In Spain, where shoppers perceive national brands to be higher-quality products, private label has also seen a degree of stagnation. The outlook is more positive in Italy, however, where the sector has grown, thanks to investment in premium-price private-label assortments at major retailers.
“We’ve seen an overabundance of products on the shelves across many of the countries, not just the UK. There is simply too much choice for the average consumer today, and private label is often the victim of cuts to the number of products that appear on store shelves," said Tim Eales, director of strategic insight at IRI.
"Retailers need to put in place the right strategies to help them focus on what shoppers want, but also to understand the impact of their decisions when it comes to reducing assortment and range, whether that’s private label or national brands.”
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.