Branded Products vs. Private Labels – Why Brands Still Matter!

The German grocery market is witnessing an exciting competition between branded products and private labels. While inflation has boosted private labels, recent developments show that brands remain essential – in fact, they continue to be powerful purchase drivers.

Insights from the trade journal Lebensmittel Praxis highlight why brands still hold their ground despite the challenges:

The power of brands remains strong
Branded products inspire trust and reliability. Consumers are willing to pay for quality and familiar names – especially when the price gap to private labels is small.

Private labels grow, but brands hold steady
In 2023, private labels peaked at 42.2% market share in German grocery retail but have since stagnated, according to NielsenIQ. At the same time, brands are regaining traction through targeted promotions.

Discounts and brands as customer magnets
Data from Smhaggle, a German app that helps shoppers compare prices by scanning receipts, reveals that brand promotions attract consumers to stores. While private labels offer higher margins, promotions on branded products result in increased basket sizes for retailers.

How the economy favours brands
Despite inflation, purchasing power remains stable, and savings rates are high. As consumer confidence grows, branded products could see increased demand.

Despite inflation and the rise of private labels, the ‘pull of brands’ persists. Branded products remain powerful market drivers in Germany – after all, even private labels thrive on the reputation of established brands.

To get in touch with our Germany team