Higher Price Premia for National Brands

Posted by Oliver Koll on Jul 02, 2020

Price setting matters and is challenging: Factors like production costs, value perceptions of different target groups, price ceilings, intended positioning, promotional strategies, seasonality, or competitive actions impact brand price levels. In FMCG markets retailers usually set prices of Private Labels at the lower end of the category price range which puts manufacturers in a tough position: If they keep or increase prices sales may go down, if they reduce prices reputation may take a hit.


Monitoring the price gap between NBs and PLs over time provides valuable information regarding the equity of NBs and PLs in a category and is also a useful benchmark for individual brands and their price positioning. We investigated the price ratio between NBs and PLs in 2015 and 2018 across 16 countries in Europe* and more than 1,200 categories. What we found:

  • The average price gap has widened: We find the biggest increase for beverages (+16%) and food categories (+13%) followed by personal care and household care (on average +9% each).
  • Only in a few countries price premia for NBs declined, for example, in Slovakia, Russia or Poland.
  • Country examples with an increase in the price premium are the Netherlands, Romania or Sweden.

All category types and more than half of the countries exhibit an increase in price premia of NBs over PLs.

Again the impact of Covid-19 will be important because during lockdown the level of promotion had dropped – but this is likely to be reversed as restrictions are eased and potential recession takes hold.

If you want to benchmark your categories and understand the specific reasons (price increases by NBs, reduced promotions, price cuts by PLs) please get in touch.

*Countries included: Austria, Belgium, Denmark, France, Germany, Hungary, Italy, Netherlands, Poland, Portugal, Romania, Russia, Slovakia, Spain, Sweden, United Kingdom
Data from 2015-2018