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Private Label Hits 'Ceiling' In EU States

Published on Jan 6 2015 9:36 AM in Private Label

Private Label Hits 'Ceiling' In EU States

Research carried out by IRI, the retail-market analysis body, has demonstrated that the growth of private label has stalled in some major EU markets.

Though now a very well-ensconced fixture in the world of European FMCGs, own-label has ostensibly reached an impasse in key EU economies. IRI's report, Private Label in Western Economies, shows that while 12 months ago only France saw private-label sales shrink, this year, France, Italy, Spain, and the Netherlands have all observed a slowdown. The publication shows that in most European countries, the halting of private label on the whole is coming directly from the food sector.

The report states that private label has reached a period of maturation, and that retailers have begun to change strategy from that of aggressive promotional activity and discounting. Price levels have increased to meet 'the growing demand by consumers for better quality and premium products'.

"Shoppers have traditionally seen private label as a good-value option, helping to lower weekly shopping bills and a way for retailers to boost sales and grow their margins," according to Tim Eales, author of the report and strategic insight director at IRI, "but the landscape is evolving, driven by smarter shoppers and an aggressive price war being waged by retailers in many countries. Private label appears to have reached a ceiling in places like France, Spain, Italy and the Netherlands, with value share slowing down, or even in decline, for the first time in seven years."

Crucially, though, Germany, Europe's largest economy, is anomalous, with private-label growth of +0.7 per cent in value share, and +0.1 per cent in unit share, owing to improved quality and more promotional activity.

© 2014 European Supermarket Magazine – your source for the latest retail news. Article written by Peter Donnelly.

 

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