T. Ozbun
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Embracing affordability without compromising quality, private labels have risen in popularity among consumers. This is particularly evident amidst the challenges of inflation, as private brands offer an alluring alternative to name brands. These products, typically manufactured or supplied by third-party companies and sold under the brand name of another company, have lower production costs. When the brand is owned by a retailer, these products are known as store brands.
Food and non-food
As of 2023, private labels in Italy experienced consistent growth, reaching a share of 31.5 percent in overall grocery retail. In discount stores, store brand consumer packaged goods held a substantial portion of the market, benefitting from their lower-cost alternative nature. However, in non-food channels like pet shops and drugstores, private labels only commanded a fraction of the market share. Generally, private brands had a higher market presence in products that are frequently purchased and have a shorter shelf life. This was evident in Italy, where store brands accounted for over one-third of the share in perishable categories like fruit and vegetables, while in beauty and personal care goods, the share barely reached 15 percent. Moreover, private labels accounted for close to 18 percent of the personal care market and just over 26 percent of the home care market, both of which focus on products with longer shelf life and lower purchase frequency compared to perishables.Consumer trends
Driven by various factors, notably inflation, consumers have adapted their shopping habits and become more mindful of their purchasing decisions. Price emerges as the primary consideration when buying private labels in Italy, which is expected given their low-cost nature. However, quality closely follows, indicating that many consumers perceive private brand products to be on par with, if not better than, national brand alternatives. As prices continue to rise, store brands purchases have increased, with over a quarter of Italian consumers stating that they have bought more private label products compared to the previous year. Nearly three quarters of consumers in the country chose to buy both private labels and name brands when shopping for groceries, while an additional nine percent stated buying solely store brands. Notably, older generations showed a preference for private labels, as they tend to be more cost-conscious and exhibit stronger brand loyalty compared to their younger counterparts, who may still perceive name brands as offering superior quality and innovation over private brands.
