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The private label market is booming both globally, and in Europe where countries report that the private label share of supermarket sales is as high as 52%. In this article we’ll give you a comprehensive guide to private labels answering everything from the question what is private label management to outlining best practices for building and protecting a successful private label brand.
In recent years, retailers have seen significant growth in private label sales, with reports showing a strengthening of store brands all over Europe.
And while the performance of private label products does vary from country to country, trust in store brands is higher than ever.
Looking at fast-moving consumer goods—a €680 billion market in 2024—private label products have been performing very well over 2024. According to the Nielsen IQ report, Finding Harmony on the Shelf: 2025 Global Outlook on Private Label & Branded Products, the weighted average of the private label share grew by 0.11% last year, and as a result made up 38.01% of total FMCG sales in 2024.
The growth we’re seeing indicates a significant shift in consumer behavior, and presents an opportunity for retailers. But before we get to that, let’s take a look at what a private label is, and why it has become such a vital part of today's market.
Private label, also sometimes referred to as 'store brand’ or ‘own brand’, is a broad term used to describe a brand or product line that is owned and sold by a retailer rather than a dedicated product brand.
Among some of the more known European private label brands are:
A private label product, is a product produced by a manufacturer but sold under a retailer's brand name. Unlike a national brand, which is available across multiple retailers, a private label product is proprietary to the specific retailer.
Essentially, a retailer contracts a manufacturer to produce a specific product, or line of products, that they then sell under their own brand.
While we often talk about private label brands as secondary product line sold by retailers to complement their sale of national or global brands, the definition of private label brands can be broadened beyond this.
In the 2007 research paper, Private Label Strategy: How to Meet the Store Brand Challenge, Kumar and Steenkamp defined a private label brand as “any brand that is owned by the retailer or the distributor and is sold only in its own outlets” (pp. 20).
Under the Kumar-Steenkamp definition of a private label, brands like IKEA, Gap, H&M, Woolworths Select, and Coles SmartBuy all fall within the lines of private label—because they are sold exclusively in the brands’ own stores.
The private label market share is growing all over Europe, with some countries reporting that private label products make up as high as 52% of super market sales, but this hasn’t always been the case.
Historically, private labels were seen as low-cost, generic alternatives to national and international brands, and the primary target audience were price-sensitive consumers.
Today, though, the no-frills offerings focused on basic necessities aren't representative of the private label market. Over time, retailers have recognized the potential to strengthen their brand image and profitability through more innovative private label products.
Several factors contribute to the rise in popularity that private labels have been enjoying over the past years.
Likely as a result of the uncertain financial situation that has painted the early 2020’s, consumers are becoming more savvy. They are looking for value without compromising quality. And now private labels often offer comparable quality to national brands at a more affordable price, which makes them the more attractive option.
On top of that, many retailers have built strong brand identities for their private labels, which has driven their customer loyalty up and results in repeat purchases.
The expansion of retail chains and the commonality of online platforms has likely also played a part, as it has allowed private labels to reach a wider audience. E-commerce, in particular, has created big opportunities for private labels.
While increased profit margins is the one most often mentioned, there are a number of other benefits related to private labels that can help retailers drive growth and strengthen their market position.
Managing private labels is not easy, and comes with a set of challenges not usually found in retail.
From maintaining consistent quality across all products and batches to building brand awareness from scratch, or adapting to changes in consumer preferences there’s a lot to cover.
Any dip in quality can negatively impact customer perception and loyalty. You’ll be competing with established national or international brands that have years of brand recognition and significant marketing budgets. And at the same time you need to stay ahead of trends and evolve product offerings to fit with the expectation of your customers.
To overcome these challenges, and turn your private label into a success, it’s important that you:
Private label protection is the process of safeguarding the identity and market position of a private label brand. While it covers everything from intellectual property to PR, it most commonly focuses on protecting the brand's intellectual property from imitation.
A unique and well-established brand is a valuable asset, and imitations—whether poor quality or comparable in nature—dilutes the brand distinctiveness.
Which means that preventing unauthorized reproduction or sale of private label products is an important challenge, as these can lead to financial losses through both lost sales and damage to the brand’s reputation.
While we’ve seen private labels be a less-preferred product choice in the past, the future of private labels looks promising. We’re seeing retail trends move in the direction of private labels.
Consumers are becoming more focused on sustainability, demanding eco-friendly, and ethically sourced products, which is an area where we’ve seen private label products come out ahead.
Understanding what private labels are, and learning how to manage them effectively are essential for success. But by investing in quality, understanding their target market, and embracing innovation, retailers can create successful private label brands that thrive—and increase their profit margins, brand differentiation, customer loyalty and supply chain control.
