The UK is Europe’s leading private label market, according to research out today.

A new report from Datamonitor has revealed that with the exception of Switzerland, shoppers in continental Europe are considerably less likely to buy private label products than their counterparts in the UK.

In the UK, private label accounts for 35% of spending on consumer packaged goods (CPG). In 2005, consumer spending on private label food, drinks and personal care totalled GBP39bn. Datamonitor predicts that by 2010 this figure will have increased by 25% to GBP48.7bn. 

“Private label is becoming less of a discount purchase. Retailers’ understanding of their customers’ purchasing habits has informed their innovation efforts, ensuring that private label products are more attuned to consumer needs than ever before,” said Matthew Adams, consumer markets analyst at Datamonitor and author of the report.  

The Datamonitor analysis suggests that although consumers often perceive private label products as inferior to famous brands, they are not always willing to pay the price premium that brands demand. Moreover, the report suggests, retailers have a clearer understanding of customer needs, are able to shape consumer demand and are producing premium quality products in increasing quantities.

Brands are at risk of becoming trapped between cheaper private label products on the one hand and premium private label products on the other, lacking the appeal of either.

“Famous brand manufacturers need to widen their range of brands to compete with private label. Retailers successfully offer value, mainstream and premium products under a single umbrella private label brand in order to capture all consumer groups and occasions, and famous brands will gain from following suit,” Adams concluded. 

For Catherine’s blog on this subject, click here.