Own brand goods prove to be rewarding for retailers' sales

OWN LABEL goods continue to seize an increasing proportion of retail sales throughout Europe over the past five years, own label sales have grown by an average of 7.5 per cent a year at current prices, compared with 3.4 per cent for overall retail sales growth.

The total market for own label goods in Europe is now estimated at £160 billion sterling and could grow a further 23 per cent in real terms by the end of the century, according to market analysts Euromonitor.

Growth has been stimulated by greater concentration of retail structures, with multiples accounting for an increasing share of the retail trade. Meanwhile, large retailers have brought with them established ranges of private label products as they have moved across borders.

The Euromonitor study also found retailers have become increasingly skilled at "introducing more sophisticated private label products into new markets and competing directly with manufacturer brands. This has included the introduction of added value and innovative private label products".

The largest private label markets are Germany with sales of $72 billion (£45 billion), Britain, with $64 billion, and France with $47 billion. Together they account for nearly three quarters of own label sales. Levels of penetration are highest in Britain, at 26 per cent and Switzerland at 22.6 per cent, while Germany and France each have 13-15 per cent.

In most other European countries, levels are around 10 per cent, except in Austria, Ireland, Italy and parts of Scandinavia, where they are much lower. However, this week another own brand product was added to the Irish market with the launch of Dunnes Stores washing powder.

In most European markets, grocery private label sales are much higher than in the retail market as a whole. For example, grocery own brand in the UK accounted for more than 40 per cent of all grocery sales in 1994. Clothing and footwear are the second biggest market.