Private label now accounts for 38% of total FMCG value sales across Europe, equating to around €229bn in spend, according to the latest Circana FMCG Demand Signals report.

"The investment pays off"

The report, which measures sales in Europe's six biggest markets – France, Italy, Germany, Spain, the UK and the Netherlands – notes that private label "outperforms" national brands in almost every category.

According to the report, the highest private label penetration of the six markets is seen in Spain (47%) and Germany (41%), while the lowest is in the UK (37%).

"Investments in retailers are paying off as more consumers perceive private labels as innovative and as good or better than many of the national brands they compete with," commented Ananda Roy, Global SVP, Strategic Growth Insights , Circana,

"Therefore, they are no longer the 'cheap' alternative. Buyers buy them because they offer something new and of good quality.”

Circana's report also found that private label "loyalists," meaning those who say they are loyal to private label products, are now equal to those who say they are loyal to national brands.

"As good as national brands"

Around 60% of shoppers surveyed said private labels were "as good" as national brands in areas such as innovation, quality, delivery claims, sustainability and good image, while a quarter believed private labels were "better ” than national brands in these areas.

Elsewhere, 21 percent of "undecided" consumers who buy both—many of them in the middle-income cohort—said they now think private labels are better than national brands.

Consumers want new experiences

"Shoppers love discovering new products and experiences from private brands, telling others about them because it makes them feel better informed and get a smart deal that's ultimately good value without compromise," Roy added.

"Retailers have gained more loyalty and leverage as a result, which could change the shape of grocery retail in the future."