How national brands are “killing” private labels

With falling prices and more promotions, national brands are regaining ground on private labels still obsessed in moving upmarket.
In 2015, private labels lost 1 point of market share value even though the number of their references on shelves continues to grow (+ 2% in one year, 24% in ten years).
Since 1997, the market share of private labels, after rising more than ten points in ten years (from 18% to 29%) began to level off in the late 2000s, never going beyond 30%.
Then, from 2013 to 2015, private labels lost two points of market share. The explanation? National brands got back their attractiveness in the consumer’s eye because their prices went down (as they were affected by deflation): the average price of national brands declined by 1.5% in 2015, against only -0.2% for private labels. This, in a context where the French were more and more attentive to the label: 57% of consumers track all price changes (+ 15 points in eight years) and 79% are guided by promotions (up 18 points).
In 2015, the turnover of national brands in promotion (on prospectus) jumped by 11.2% while that of private label was down 1.7%.
For while the price war rages on major brands, private labels continue to focus on their moving upmarket. The sales of premium assortments increased by 2.3%, that of organic private label increased by 4.7%, while standard private label are losing ground (- 2.3%).
In hypermarkets, the price gap between national brands and private label melted by half in three years!


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