E.U. Private Label Struggling But Food Sector Stays Strong, Says IRI

June 27th, 2016 Private Label Market Trends

Wabel partner IRI's new "Private Label in Western Economies" study reports that the European private label value market share has fallen by 0.6 points to 38.3% in 2015. France shows the highest decrease in market share although the private label value share remains high (34.1%), and the UK scores best with an increase of 0.4 points bringing its value share to 51.8%. 

The good news is that the food sector remains key for retailers and manufacturers across Europe, with frozen food (43%) and chilled & fresh (39%) as the leading categories in terms of value market share in 2015. Even better news, with intimate knowledge of retailers' buying objectives and strategies, Wabel is in a great position to assist both retailers and manufacturers year-round and help them find the right innovations to make private label more attractive to consumers.

Overall findings.

The IRI "Private Label in Western Economies" Special Report highlights a continuing downward trend for private label, in part due to overall shrinking of private label assortment across Europe, as well as a decreasing price gap between private label and national brands. 

The IRI "Private Label in Western Economies" Special Report focuses on Italy, Spain, France, the UK, the Netherlands, Germany, the US and Australia. The Private label share is declining in most of these economies, except for in the UK and Australia who both show increases, although the context for these two countries is different. The UK enjoys the highest private label market share, a whopping 51.8%, while Australia has the lowest penetration of private label with 13.9% of market share. 

Private label market share of total FMCG

Difficult year for private label in France and Spain

2015 was difficult for private label French retailers and manufacturers. All categories struggled from 2010 to 2015, with a total value increase of only 1.5% whilst national brands grew by 12.8%. The study states that « private label growth needs to be encouraged across the country to compete with the promotion pressure coming from national brands ». Spain also struggled against national brands, partly dew to the « consumer belief in the superior quality of national brands ».         

In Germany private label value share is decreasing (-0.8 points) but remains high with a value market share and a unit market share at 38.4% and 50.9% respectively. Unlike French and Spanish consumers,  "German shoppers tend to accept higher prices for higher quality goods" although the market is extremely price sensitive and favors discount formats. 

In the UK, the value share of private label in the total market, including all grocery retailers, is up year on year by 0.4 value share points. In the supermarket sector alone however, private label is down by 0.4 value share points year on year. This highlights the potential loss of supermarket private label sales to the discounters, especially from the economy range.

Wabel insight.

Wabel notes that the "Private Label in Western Economies" Special Report finds that the private label food sector is still a key market for European retailers and manufacturers, with frozen food (43%) and chilled & fresh (39%) as the category leaders in terms of value market share in 2015, and household (31.2%) as the leading non-food category. The upcoming Wabel Household and Personal Care Summit, taking place in October 2016, is therefore bound to be bigger then ever. Attended by over 200 buyers from the leading European retail groups, the Wabel summits (Frozen, Chilled & Dairy, Household and Personal Care, and Grocery) represent unprecedented opportunities for private label players to meet and form concrete business partnerships. 

With extensive market insight and intimate knowledge of retailers' buying objectives and strategies, Wabel is in the best position to assist both retailers and manufacturers year-round and help them find the right innovations to make private label more attractive to consumers.