Aldi has reached a new milestone: nine in ten baskets now contain only store-brand items in the UK. That figure, reported in Kantar’s June 2025 update, cements Aldi’s reputation as the retailer where national brands are optional extras rather than the core. Lidl is following close behind, adding 150 new premium private-label products in the first half of the year and signalling that discounters now see own-label not as substitutes but as “hero ranges.” Together, the two discounters hold 17.7% of the UK grocery market, their highest share on record.
Tesco and Sainsbury’s Push Premium to Defend Share
For traditional grocers, the fightback is focused on premiumisation. Tesco relaunched its Finest range in March, adding 400 new SKUs and by June reported 12% year-on-year sales growth, according to company filings. Sainsbury’s has pushed its Taste the Difference brand into frozen ready meals and plant-based lines, backed by a £60 million campaign.
In France, Carrefour’s Bio line grew 14%, lifting organic share against rivals. Analysts note that positioning private labels as aspirational — not just value — is critical to holding middle-income households who once defaulted to national brands.
“Retailers aren’t just filling price gaps with private labels — they’re recoding them as flagship brands,” said a Bernstein analyst. “That is a structural shift in bargaining power.”
Europe’s €500B Store-Brand Economy
Across Europe, private label sales hit €500 billion in the 12 months to June 2025, Kantar reported — equal to 38% of all grocery spend, up from 35% two years ago. Spain (+9.4%) and Germany (+7.8%) saw the fastest growth, while France crossed 40% share for the first time.
Even as eurozone food inflation slowed to 2.4% in May 2025 (Eurostat), shoppers didn’t return to brands. Dairy, frozen, and household goods are the strongest-performing categories. According to IGD’s June shopper survey, 64% now rate private labels as equal or superior in quality to national brands, up from 49% in 2021.
Shopper Habits Harden Into Loyalty
What began as inflation coping has now become a structural shift in consumer behaviour.
- The UK frozen food market is projected to hit $19.4 billion in 2025, with ready meals accounting for nearly half that spend (Future Market Insights).
- In France and Germany, NIQ reports over 50% of shoppers now buy more private-label goods than ever before.
- Across Europe, private label commands nearly €4 in every €10 spent on groceries (EuroCommerce).
Loyalty mechanics are amplifying this shift. Tesco’s Clubcard Prices and Sainsbury’s Nectar offers are binding households to grocer ecosystems at the same time shoppers stretch budgets with frozen goods, bulk packs, and entry-level ranges.
The pattern is mirrored in the US: Costco’s Kirkland Signature accounts for an estimated 25% of Costco sales; Kroger’s Simple Truth range has crossed 3,000 SKUs and grown 11% YoY; and Target’s Good & Gather surpassed $3 billion in sales in 2025. Shopper behaviour is converging on one truth: private label isn’t a stopgap — it’s the default.
National Brands Face a Structural Reset
For suppliers, the implications are stark. Nestlé’s Q2 2025 report showed European volumes down 4%, despite price hikes. Unilever also cited “intensified private-label substitution” in its H1 update, warning that margins in household goods are under structural pressure.
Bernstein analysts call this a “permanent reset” in category pricing power. By 2026, they forecast private labels could surpass 45% of EU grocery spend, a tipping point that forces branded manufacturers to either innovate rapidly or cede share permanently.
GSN analysis:
Private labels have passed the point of no return. With nearly €4 of every €10 in Europe flowing to store brands, supermarkets are no longer just retailers — they are brand owners reshaping loyalty, margin, and innovation. For global manufacturers, this is not a temporary squeeze but an existential reckoning. The battleground will be Q4 promotions: supermarkets are set to push premium own-label Christmas ranges just as national brands resort to deeper discounts. The balance of power has shifted — and shoppers are deciding who wins.
