In the United States, private brands account for less than 20 percent of all retail until sales. We love our branded products more than we want to save money. 🙂
But in Western Europe, the story is much different. More than one-third of unit sales involve private brands.
As Nielsen reports:
“Price is one factor helping bolster private label growth in Europe. Notably, private label can be as much as 30 percent less expensive than brands across the Big 5 Countries. Across categories, private label has a price index of less than 60 percent in health, personal care, and home care, compared with 90 percent in perishable fresh foods, where the average prices are much closer to those of brands.”
“However the success of private label isn’t just about cost. Retailers in Europe have also created new demand, particularly by offering new premium private-label lines and by launching dine at home meal offerings with bistro or restaurant quality foods, a trend that is most evident in the U.K.”
Click the Nielsen chart to read more.
12 Replies to “Private Brand Sales Booming in Europe”
Traveling outside of the United States as a consumer one can notice that private brands have a much smaller presence. Inside the united states is seems that wherever you want to buy is always a branded product. As a consumer I feel like I would be a much happier consumer if i had more of a choice. I think that the economy as a whole would also benefit greatly from diversifying the market. This way we could sway away from the mega-corporations that have a lot of power in the united states.
We have the choice. 🙂 We just choose name brands.
Yes, it is true and the same situation in China. In China private stores being everywhere. I would say 100% of Chinese have at least 1 time private retail shopping experience. That’s a way how people dress different, unique and standout of the crowd, especially popular among young people who like to look fashionable with much less cost than branded cloth. Everything with a brand name in China is experience and no price negotiable. Restaurants are same here. Chinese like food like American like beers. We enjoy to do research on street food and bistros and hangout with friends to try different ones.
I think the different attitude to private brand between american people and western europe people indicates the difference of consumer behavior of two cultures. Five important factors were identified: collectivist culture, perceived risk, price, quality and store loyalty. From Nielsen report, we can see 4 next trends in Europe, the price differential between private brands and national brands will narrow, this is a good news for people who want to expend retail brand in europe market. However, in the US market, it still hard to build private brand market even the price are same or lower.
That is a quite interesting fact. So, in some term, it may be easier to firstly expand your brand to Europe rather than the United States. The lower price could be the criteria to occupy the market and gain the fame.All in all, the quality and premium private label might be the two way of being known.
European customers are highly price-sensitive than U.S. customers, and that lead the private brand account for a larger number of sales. Furthermore, If a private brand can fulfill our needs and provides similar quality with lower price, as it spends less to brand itself, then why not to purchase it? For me, if I want to buy luxury goods, I would still consider to buy a well-known brand. However, if I am going to buy general merchandise or food, I wouldn’t mind to try private brand as they provide decent quality with lower price.
I found a very interesting thing when I traveled in Italy at winter vacation. People in Roma is much more price sensitive than those in other places and they always consider price of goods as the priority. However, when I moved to Milan, there was totally different. Private brands always attract people’s eyebrows. Not only in dinning, almost in every aspects of life, people follow this private brand trend because they assumed private brand is a sign of highly individualism, making them different.
Many people tend to buy branded products because they believe they have better quality than the store brand. Although it may be true in most cases, it becomes more of a habit to lean more towards “known” brands and we become less likely to want to try private brands. We like to think that even if we’re paying more, the branded product is worth its price. If private brands offer the same product for most often a lower price, it wouldn’t hurt to try them out. We might even find that they’re not much different from the branded product.
This article shows to us a very different set of consumer behavior. Most of us do know that there’s not always a benefit in going for the brand name in terms of quality or that it is minute, yet we go for a brand for psychological reasons such as peace of mind and status. However, for the braver or more practical souls, who go ahead and buy private labels, there’s the realization that there’s barely any difference between a brand name milk and a private label milk. Hence they choose to continue shopping according to their personal positive experiences rather than give in to others’ ratings or perceptions of a better, costlier brand.
I think the difference for customers brand awareness between America and Europe indicates the difference of consumer behavior of two cultures. I really want to say the more private brand created, the more people pay attention on the market. In the dressing stuff, American customers really don’t care about that much, they care more on the quality attributes than the style, fit concern. In Europe, Ethnocentrism is heavier, people don’t want to dress the same whereas Americans could put thousands of La coste Polo at the same time.
As many people have mentioned, I think it is a psychological thing when people only want to buy brand name products. In almost all cases, the private label is the same however if a consumer has tried to use a private label and it looked, tasted or felt different than the brand that is a bad thing. In many areas in Europe the economy is still trying to recover so many business owners are opening small stores and trying to sell private labels at competitive prices so they can make money. They understand that the consumers there are more willing to not be so loyal to a brand name.