Private label is tightening its grip on the UK grocery market, now accounting for 52 per cent of all units sold, as shoppers continue to prioritise value amid ongoing cost pressures.
The milestone comes as part of a broader European trend identified by Circana, but the UK remains one of the most advanced own-label markets, alongside Germany.
According to Circana’s latest analysis, private label share in the UK has been steadily rising since 2021, driven by a combination of sustained price sensitivity and improving retailer execution.
Supermarkets have not only kept entry-level lines competitive but have also expanded premium and lifestyle-focused ranges, positioning own label as a credible alternative to branded products across a growing number of categories.
Similar trends are seen in other European countries.
Store brand products already make up more than half of CPG and FMCG units sold in some countries, led by Spain at 59 per cent and the Netherlands at 56 per cent, where discounter supermarkets are more established. Private label unit share has also risen to 52 per cent in Germany, and stands at 46 per cent in France and 36 per cent in Italy.
Tracking sales of millions of SKUs over more than 230 FMCG categories, Circana’s analysis found that supermarkets have been keeping prices low and quality high, while tapping into health and lifestyle trends.
They have also been offering more premium own-label ranges and innovative new products to challenge national brands. Circana suggested that retailers’ targeting of social media content towards younger, less brand-loyal shoppers is also playing a key role in driving demand.
While national brands have recently been winning shoppers back and slowing the growth of private label, the study notes that higher food inflation following the conflict in the Middle East could lead to another rise in the number of own-brand products in shopping baskets by the end of the year.
Online and AI-driven shopping, which typically prioritise cheaper products that meet the same needs, are also expected to give supermarkets another boost this year as shoppers order more groceries online.
“Supermarket private label brands have spent the last decade becoming powerful brands in their own right,” said Ananda Roy, Senior VP of Strategic Growth Insights at Circana.
“Given that a normal shopping basket today costs the same as a premium basket did last year, price-conscious consumers are making hard decisions about which products to buy. Retailers’ product ranges include cheap basics, premium treats, healthy and high-protein foods, and trendy lifestyle items, which are proving a trusted and attractive alternative to national brands and changing how people shop all over the world.
“Retailers are also targeting younger generations who are less loyal to big brands with TikTok shops and viral moments, discounters are opening more stores, and AI makes it easier than ever before to compare products on price and function alone. National brands will need to rely on more than just the reputation of their brand name or heavy discounts to tempt shoppers away.
“The cost of living crisis is expected to intensify in the second half of the year as the war in Iran increases the prices of fertilisers, transport, distribution and ingredients. This is likely to give retailers another boost, with private labels growing quickly again as households look for ways to save money.”
Circana also found that on-shelf promotions, loyalty pricing, and price-match strategies have intensified as part of a price war across the sector, with branded products being discounted far more heavily than private labels. 34 per cent of branded unit sales were on promotion, compared with 14 per cent for private label, across Europe’s six biggest grocery markets.
Roy concluded: “With margins already squeezed, national brands will need to take a deep dive into shopper and loyalty data, as well as pricing and promotion strategies, if they are to compete and survive. Saturating the market with promotions is not a long-term survival tactic.”