Price gap between Brands and Private Label widens

Over the past five years prices of Private Labels have increased by an average of 10% – the same change as for National Brands across 79 categories in nine European countries. Starting from a lower base this means that the absolute price difference (which may be the one consumers focus on) has become larger. 

The country price gaps (unweighted across categories) vary from more than 100% in Belgium to only 50% in Romania whereas category price gaps range from 500% to essentially zero or below (brand selling at Private Label price levels). The value-weighted price gaps are substantially lower (50% only) indicating that in high-spend categories brands may be more concerned about the premia they charge vis-à-vis PL.

Leading with respect to branded price premia are often personal care categories although brand price premie in the same category differ dramatically across countries signaling opportunities to learn across borders.