Private Label: the retail sector in rude health

15/08/2017
In brief
Private Label is synonymous with constant growth on both sides of the Atlantic, regardless of economic cycles. According to Nielsen, its market share has now reached record highs in nine European countries. For the first time, it lies at 30% or more in 15 of the 20 countries analysed by the PLMA.

Nowadays, Private Label is synonymous with constant growth on both sides of the Atlantic, and all indicators seem to confirm that it is unaffected by economic circumstances. According to Nielsen, the market share for distributor brands has reached record highs ​​in nine European countries (Germany, Italy, the Netherlands, Belgium, Poland, Austria, Sweden, Norway and Denmark), and for the first time it tops 30% or more in 15 of the 20 countries considered by the PLMA (the Private Label Manufacturers Association, which represents a membership of over 4,000 manufacturers worldwide) when drawing up its yearly report. The most significant increases in private label sales came in Austria, with a rise of 2.8 points to 43%, followed by Germany (up 2.1 points to 45%) and Poland (up 1.4 points to 30%). Market shares reached or exceeded 40% in seven countries: the UK, Germany, Austria, Belgium, Switzerland, Spain and Portugal. Despite remaining among the lowest in Europe, the market share in Italy grew for the fifth consecutive year, recording its biggest increase since 2012. In the US, meanwhile, the market share for private label products is about half of the European average at 17%. But the sector is growing fast. 85% of shoppers buy private label products several times a month, and 69% consider them more innovative than traditional brands. According to the PLMA, shoppers’ preference for private label products saves them around $30 billion a year.  Kantar Retail also believes that the sector’s turnover will grow rapidly, as it meets two fundamental needs of US retailers: recovering their margin and adapting to match the strategies of certain key players (ALDI and LIDL, in particular, whose range is largely composed of own-brand products). Kroger, the world’s third-largest retailer, makes around 28% of its revenue from own-brand products; this includes the organic brand Simple Truth, which was one of the key factors behind the difficulties faced by Whole Foods prior to its merger with Amazon.

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Source: GDO News