Navigating Inflation Understand the trends driving inflation, the business implications and resulting shifts in consumer behaviour. Our insights and Pricing and Availability Tracker help you to navigate price pressures quickly and effectively.

Navigating Inflation: How to Win in Private Label – Lessons from France, Germany and the UK

Alexandre Loeur Profile Picture
Alexandre Loeur Bio
Raphael Moreau Profile Picture
Raphael Moreau Bio
Robert Eveson Profile Picture
Robert Eveson Bio

Private label tends to benefit from inflation. However, despite record inflation in France, Germany and the UK, the market share of private label in the three countries remained broadly stable across fmcg in 2022. There are early signs of positive change for private label in 2023.

Price rises and a high penetration rate keep private label from gaining share in 2022

As inflation rates surged, private label remained cheaper than brands, but experienced stronger price growth. This narrowed the price gap between brands and private label, diminishing its key advantage.

To benefit fully, private label needs to harness its price advantage in economy and basic ranges. Retailers can introduce or reorganise their lowest-tier ranges under one umbrella private label brand, with a simple and unified logo, easily identifiable in stores and online. This was implemented by Asda and Sainsbury’s in the UK. Reformulating recipes to lower costs, clearly highlighting price reductions on the packaging, is a tactic used by German discounter Norma.Value Share of Private Label for Selected Industries* in France, Germany and the UK

It is time for retailers to capitalise on changing habits

Euromonitor’s annual Voice of the Consumer: Lifestyles Survey shows a delayed spike in consumer willingness to buy private label products in 2023, following two years of high inflation. This shows the importance of habit persistence in consumer behaviour, another reason for the lacklustre performance of private label in 2022. The 2023 uptick is a positive sign of change.

Respondents who intend to increase their purchase of private label/store brand goods in the next 12 months

Positioning private label as affordable quality and investing in e-commerce is key to sustained private label growth beyond the inflation surge

The upcoming price stabilisation is closing the window of opportunity for private label. The fall in the costs of raw materials has led governments and regulators to put pressure on grocery retailers and manufacturers to pass these on to consumers. While not immediate, the expected price stabilisation in retail will limit the price advantage of private label against brands and could hinder its future ability to gain market share.Food Beverages and Commodities chart

Developing an image linked to affordable quality will be key to long-term growth for private label beyond the inflation surge. This can be achieved by elevating premium private label ranges, either launching or expanding product lines with in-demand attributes such as organic, all natural or sustainable. Investing in marketing showcasing quality private label ranges and fresh produce and actively targeting Gen Z to attract new consumers.

Store refurbishment and expansion in more “affluent areas” for discounters will help change the perception of these retailers, and their private label offering.

Expanding in e-commerce is also key to boosting private label sales. French, British and German consumers have different online shopping habits, meaning different approaches are required to succeed. The French favour click-and-collect, known as “drive”, the British prefer home delivery, while the German eco-system is lagging behind the other two countries in terms of online sales of groceries.

Discounters, which outperformed supermarkets and hypermarkets in 2022 stand to benefit the most from shifting towards affordable quality and e-commerce.

Discounters continue to take a cautious approach to investing in e-commerce, typically only offering non-food products for which they can use third party logistics providers. E-commerce for groceries, at least that based on home delivery, has not been a focus for discounters; however, this is starting to change and could unlock a wider consumer base for discounters and, by extension, private label. 

Private label needs to update its playbook to succeed. Read our briefing Navigating Inflation: How to Win in Private Label – Lessons from France, Germany and the UK for more analysis, case studies and data on how private label is navigating inflation in France, Germany and the UK.


Interested in more insights? Subscribe to our content

Explore More

Shop Our Reports

Top Business Risks in 2022: Omicron, Supply Chain and Inflation

In 2022, global business continues to face various risks, with a persisting Coronavirus pandemic, supply chain disruptions and inflation being top of mind for…

View Report

Private Label: Opportunities for Drinks in Europe

Channel shifts and recent shock to economies globally will shape the way consumers perceive private label within drinks. Changing consumption patterns will…

View Report

Voice of the Industry: Food and Nutrition

This report forms part of Euromonitor’s Voice of the Industry series and features the results of a survey of professionals working in the Packaged and Fresh…

View Report
Related Content Learn More