New research from Market Reseach company Kantar has found that private labels currently account for nearly 22% of global grocery spend, up from 21.1% in 2021. Kantar said private labels have carved a strong trajectory, seeing a nine-fold growth in 2022 compared to the previous year.
Kantar's Global Omnichannel Report said that across all major modern trade channels, private label products are surging ahead of brands. The largest gains have been observed in super/hypermarkets and convenience channels, where store brands have gained 0.8% and 1% share, respectively.
Discounters
At the same time, brands actually faired comparatively well in the discounters, seeing higher growth in this largely private label-dominated channel. While the success of private label can be partly attributed to the rapid growth of discounters, Kantar said it is important to note that 68% of store brand growth originated from outside this channel.
Europe A Key Market
Kantar said the story of private-label success remains consistent across regions, with gains observed in most markets. The report said that Europe is the 'key region' for private label, fuelled by the importance and growth of the discount channel, but not limited to it.
According to the report, 'Economic conditions have incited a behavioural shift among consumers towards discounters and private labels, altering the retail market dynamics. Amid the rising cost of living, shoppers are increasingly leaning towards private label products, yet the beneficiaries of this trend are not uniform across the board.'
The 'Big 6'
According to Europanel data from the 'Big 6' European markets, France, Germany, Great Britain, Italy, the Netherlands, and Spain, growth can also be attributed to two other factors, firstly, higher-than-average price rises, accounting for over half the rise in private label value share. A second factor to consider is the migration of shoppers from brands, which drove more than a quarter of the growth.
Limited Presence
In Asia, Kantar said private-label's presence is still limited, while Latin America similarly still favours brands, which account for 95% of grocery spend. France stands out as the only European market in which store brands did not gain share, contrasting with double-digit growth in fourteen European markets.
Colombia and the United States are the only non-European markets featuring in the top 20 biggest private-label markets globally. Despite seeing +21% and +7% growth respectively, Kantar said store brands capture less than one-quarter of spend in both, remaining comparatively lower than many European markets.
Aldi and Lidl
In Britain, where private-label sales in actual terms are greater than anywhere else in Europe, Kantar said the focus on private label by discounters Aldi and Lidl has seen them lift their percentage of private label sales from 86.5% in May 2021 to 87.8% in May 2023.
They do so while concurrently expanding their share of private label spending and volume.
Aldi and Lidl saw their share of the private label spending market increase from 21.3% in May 2021 to 26.7% in May 2023.
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