Consumers more often opt for private label in supermarkets. Market share rises to 42 percent

“That will be no different this year, so A-brands remain under pressure,” says advisor Servé Muijres of research agency GfK. In the Netherlands, the market share of private labels grew by 2.2 percentage points to 42 percent last year.

According to the researcher, consumers are more loyal to their needs than to their brands. Many Dutch people therefore trade in their trusted brand items and buy private labels as an alternative. “A brands are under severe pressure from inflation,” says Muijres. “Even in the Netherlands, discounters such as Aldi and Lidl are adding A brands to their ranges, but this is nowhere near enough to compensate for the loss of market share.”

In the Netherlands and other European countries, most consumers have adjusted their behavior because of inflation. “That applies to more than 90% of Europeans, who shop much more consciously,” says Muijres. “They buy more from pre-made shopping lists, which they also stick to.”

Supermarket customers therefore succumb less often to the temptation in the store and buy less on impulse. If they already buy A-brands, it is promotions that attract attention. These impulse purchases are motivated by lower prices. Supermarkets don’t care. Promotions with A-brands are usually paid for by the brand suppliers and if customers switch to private labels, the store organization makes more profit because private brands have a more attractive margin for them.

Alternatives

Where it does hurt is when customers decide to trade supermarkets they perceive as more expensive for cheaper alternatives. According to GfK, 15 percent of consumers surveyed say they will go to discounters such as Aldi or Lidl more in the coming months, while supermarkets can expect a 2 percent drop in visitor numbers. It is striking that the enthusiasm for online shopping is also declining (-8 percent) and convenience stores and delicatessens can expect 18 percent less business, according to GfK.