In 2023 European shoppers bought more private label items than in 2022. This increase in number of items sold, is a remarkable difference with 2022.
That year, private label only gained volume share because its volume decline was less than falling sales of branded products. In 2022, both branded and own label couldn’t match the 2021 sales levels, which peaked as a result of Covid-19. But in 2023 consumers massively switched to private labels, as many worry about high inflation rates.
This and much more can be seen in the new edition of PLMA’s Internatonal Private Label Yearbook, for which NielsenIQ surveyed 17 European markets. Overall, retailers sold 2% more private label items in 2023, with Portugal (+9%), Czechia (+8%), Poland (+6%) and Spain (+5%) scoring well above average. Shoppers in the Netherlands and in Belgium (both -1%) and in Hungary (-8%) however, bought less private label items.
Overall, sales of private label items have been resilient. Reduced volume sales in 2022 compared to the record year of 2021, turned in 2023 into a 2% growth of private label items sold in Europe’s retail channels. By contrast, total volume sales – including branded items as well – was still declining in 2023. In 11 of the 17 countries surveyed, retail shoppers bought less items, leading to an overall volume reduction of -1%.
In 2023 the European grocery market value grew by 9% to €883 bn. With EUR39bn more value sales, private label accounts for 54% of this €72 bn increase. In 2023 private label accounts for 38.5% of the European grocery market, with sales of EUR340bn in the 17 countries surveyed.
From a value perspective the Yearbook clearly shows the impact of inflation. Turnover of all items – brands and private label increased despite the -1% in unit volume sales in the 17 European countries. Increasing costs for ingredients, material, energy and other inputs were to some extent factored into consumer price levels, hence the inflation.
Excluding branded, this inflationary effect is also visible. The 2% volume increase only partially accounts for the 13% value growth of private label in the 17 countries. In Hungary – where volume sales on item level of private label declined by -8% – the turnover of private label still increased by 12%. Here baby diapers is the leading private label category. In Portugal where shoppers bought 9% more private label items, turnover increased by 23%. Cheese is the main category for private label, not only in Portugal but 10 out of the 17 markets surveyed.
Overall cheese is Europe’s category with most private label growth, followed by bread, sweet biscuits, yoghurt and frozen potato products who respectively complete the European top 5. Especially in times of inflation, more consumers appreciate the quality and price value of private labels.
Switzerland remains the country with highest private label shares, but it seems as if it has reached the ceiling in the alpine country. Growth percentages are significantly lower compared to other European countries. Switzerland is the only country with a single-digit value share growth (4%) while turnover of private label in all other countries surveyed increased by at least 10%.
Two years ago Czechia had the lowest private label shares, but in recent years it has grown its sales volume significantly and to such an extent that the Central European market bypassed Norway, which now has the lowest volume share. Also in Czechia cheese is the category with strong growth of private label sales.
Like Norway, also in Sweden private label share is relatively low despite the fact that in both Nordic countries private label is growing. In Norway frozen fish leads the growth, in Sweden its frozen meat. The further south in Europe, the larger the appetite for private label. In Spain and Portugal private label is already dominant both in volume and value, but in 2023 the growth continued.
Falling sales levels after 2021, when Europe’s grocery sales peaked as a result of Covid-19, have been met in 2023 by recovering sales of private labels. In an inflationary environment, Europe’s consumers massively embrace private labels, appreciating their price and quality.
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