In 2023, sales of private label in Europe hit the 340 billion € mark, an all-time record. Private label now makes up 38.5% of the total grocery market value. Private label turnover increased by +13% last year. In the same period, manufacturers’ brands sales grew by less than half that much, at +6%.
More details about private label performance can be found in the new edition of PLMA’s International Private Label Yearbook, for which NielsenIQ surveyed 17 European markets: Austria, Belgium, Czechia, Denmark, France, Germany, Greece, Hungary, Italy, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland and the UK. The analysis includes some 500 retailers and hundreds of food and non-food supermarket products.
As trade publications and industry experts have been predicting for months, in 2023, consumers massively switched to private labels, as many worry about high inflation rates. In addition, as has happened before during crises, once they found that the quality of the products was equal to or better than familiar manufacturers’ brands, they have stuck with the retailers’ own brand products.
Another 2023 presumption was confirmed: Overall, the grocery market, private label and manufacturers’ brands combined, lost a mere -1% in volume (units). In the majority of the countries, consumers bought less products than in the previous year. Despite the challenging market situation, private label managed to achieve a volume growth of +2%. Manufacturers’ brands registered a decline of -3%.
From a value perspective, the Yearbook clearly shows the impact of inflation. Turnover of all items – brands and private label – increased by 72 billion €, almost 9%, despite the -1% decrease in unit volume sales in Europe. Private label is a true driver of growth: 54% of the total market growth is attributable to private label sales.
In the coming months, food inflation is expected to remain high. As soon as inflation starts to fall and households have more breathing space, it will be the question whether volumes, which have been under pressure in the past two years, will pick up again. Some experts believe that even then, consumer buying behaviour will remain cautious and frugal.