According to Circana, private label growth is expected to accelerate further in 2026, driven by persistent inflation, which is forcing branded manufacturers to raise prices, and by AI-driven purchasing behaviours that increasingly prioritise lower-cost alternatives offering similar consumer value.
Although branded manufacturers have managed to recover part of their customer base and slow the advance of private label, the inflationary environment—linked in part to geopolitical tensions in the Middle East—could once again strengthen private label’s position in the shopping basket towards the end of the year. In addition, the continued growth of online sales and the increasing use of AI are expected to further enhance the appeal of retailer brands, particularly as digital ordering volumes rise.
According to Circana’s latest analysis of the European FMCG market, private label unit share has increased every year since 2021, with cumulative growth of more than three percentage points over this period and further gains expected in 2026. Retailer brands now account for more than half of FMCG units sold in several countries, led by Spain at 59% and the Netherlands at 56%, where discount retail formats are well established. Market share has also reached 52% in both the UK and Germany, while standing at 46% in France and 36% in Italy.
In value terms, private label represents 42% of total FMCG sales across the six largest European markets, equivalent to €324 billion. Market share stands at 31% in Italy, 36% in France, 44% in Germany and the UK, 52% in Spain, and 55% in the Netherlands.
Category dynamics
Food and beverages have been the main drivers of private label growth, particularly in ready meals, snacking, beverages and dairy. Significant growth has also been recorded in bottled water, supported by competitive pricing, intensive promotions, limited editions and increased consumer segmentation. Non-food FMCG categories continue to face stronger pressure from branded manufacturers.
Based on the analysis of millions of SKUs across more than 230 FMCG categories, Circana highlights that retailers have succeeded in maintaining low prices while delivering consistent quality. Private label ranges are increasingly aligned with health and lifestyle trends, offering more premium propositions and innovative product launches. Retailers’ strategies of targeting younger, less brand-loyal consumers through social media are also playing a key role in driving demand.
Retail–private label–new generations connection
Ananda Roy, Senior Vice President of Strategic Growth Insights at Circana, notes that private label has spent the past decade establishing itself as a credible brand in its own right. In a context where a standard shopping basket now costs as much as a premium basket did a year ago, price-sensitive consumers are being forced to make difficult purchasing decisions.
Retail assortments now span from affordable essentials to premium indulgences, health-focused products, high-protein options and items aligned with the latest lifestyle trends. As a result, retailer brands are increasingly perceived as reliable and attractive alternatives to manufacturer brands, reshaping purchasing behaviour globally.
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Retailers are also strengthening their connection with younger consumers—who tend to be less loyal to traditional brands—through digital formats such as TikTok Shop and viral marketing dynamics. At the same time, AI tools are making it easier than ever to compare products based on price and functionality alone. In this environment, branded manufacturers will need to rely on more than brand recognition or heavy discounting to remain competitive.
Short-term outlook
Looking ahead, the cost-of-living crisis is expected to intensify in the second half of the year, as the conflict involving Iran drives up costs for fertilisers, transport, distribution and raw materials. This scenario could further benefit retailers, reinforcing private label growth as households continue to seek ways to manage spending.
With margins already under pressure, branded manufacturers will need to deepen their use of shopper data and loyalty insights, as well as refine pricing and promotional strategies in order to compete effectively. According to Circana, flooding the market with promotions is not a sustainable long-term strategy.
In the six largest European markets, 34% of manufacturer-brand units were sold on promotion, compared with just 14% for private label, highlighting the growing intensity—but uneven impact—of the ongoing price war in the sector.
