Things are looking up in Italy. After a sales decline throughout 2014 and a tough start to 2015, value sales of private label have been increasing since May last year with value sales of €9.6 million.
Private label’s value market share for all fast moving consumer goods was 17.5% in 2015, rising to 54% if hard discounters are taken into account.
But retailers used price promotions for national brands in 2015 which meant that they were often cheaper than their private label counterparts.
In order to compete, Italian private label players have been increasing their premium price assortment, and investing 5.4% more in premium ranges compared to 27.6% less for economy tier products.
"What is clear is that Italian shoppers are choosing private label premium tiers, organic, free range, high quality, etc. These are the more expensive products, economy tiers are decreasing quickly, down by 40% in value in 2015.
"This shows Italian consumers prefer to spend more to have more quality/value," said Eales.
“Shopper loyalty, assortment and pricing are key areas to focus on. There is a need to increase purchase frequency and also to improve the convenience perception of private label products. Improving out of stocks is a growth strategy for retailers,” said the report, which found that Italian private label brands lost 4.7% in sales due to poor management of the shelf.