Private label passed half of Europe's units. What that does to your price ladder

In April 2026 Circana reported that store brands passed half of all FMCG units sold across Europe's six largest grocery markets. The UK sits at 52 per cent of units and 44 per cent of value. Spain is at 59 per cent, the Netherlands 56, Germany 52, France 46 and Italy 36. The share has risen every year since 2021, and Circana expects it to rise again through 2026.

Most branded commercial teams have absorbed this as a headline about competitiveness. It is more useful read as a statement about price architecture, because the gap between unit share and value share is where the argument actually sits.

The gap between units and value is the whole story

Own brand takes 52 per cent of UK units but only 44 per cent of value. That eight point spread is the price premium brands still command, expressed as arithmetic. It is the number a brand is defending every time it sets a price.

The premium is real and it is worth protecting. The problem is that most price architectures were designed when the gap was wider and when own brand quality sat visibly below the brand. Neither of those conditions holds now. Retailers have built tiered ranges with their own identities, and premium own label lines at Tesco, Sainsbury's and M&S now compete on quality rather than on price alone. Aldi, Lidl and M&S together account for roughly a quarter of the UK food market and are around 95 per cent own brand.

A ladder built for a 40 per cent gap behaves differently at 25 per cent. The rungs that felt comfortable become switching points.

Where ladders break first

In practice, the break rarely appears where teams expect it. Three patterns recur.

The mid-tier pack

Entry packs are usually priced with care because they carry the value message, and large packs are usually priced with care because they carry the volume. The pack in the middle, often the four or six, tends to inherit its price from whatever the ladder implied three years ago. It is also the pack most likely to sit next to a premium own label equivalent at a materially lower price per unit.

The promoted rung

A ladder that looks coherent on list price can invert entirely once promotions are included. If the six pack goes on deal every third week and the four pack almost never does, the shopper facing the shelf sees a price per unit that runs backwards. The architecture on paper says one thing and the architecture in market says another.

The channel edge

Discount and convenience carry different ladders that were often set by different people at different times. Where a brand is present in both, the implied premium can differ by more than the brand premium itself, which teaches heavier shoppers to buy in one place and lighter shoppers in another.

Three things worth measuring before the next price round

• Realised price per unit by pack, not list price. Strip promotions out of the series, then rebuild the ladder on what shoppers actually paid. If the order of the rungs changes, the architecture has a problem that a list price review will never find.
• The gap at the shelf edge, by retailer. The average gap across a market is close to meaningless. What matters is the gap facing a specific shopper in a specific store against a specific own label tier, and that varies enormously between a discounter and a premium grocer.
• Cross elasticity against own label, separated from base elasticity. A price rise that loses volume to a competing brand is a different problem from one that loses volume to own label. The second is much harder to reverse, because winning a shopper back from private label takes considerably more than matching the price that lost them.

Why the answer is structural rather than tactical

The instinct when the gap widens is to promote harder. Circana's data suggests that instinct is already well established. Around 34 per cent of branded units across the six markets sold on promotion, against 14 per cent for private label. Brands are discounting roughly two and a half times as often as the own label lines they are competing with.

That is not a defensible position over time. Heavy promotional dependence lowers realised price, trains shoppers to wait, and leaves the brand paying for volume that a better architecture might have held at full price. It also makes every subsequent elasticity estimate less reliable, because the price history becomes mostly a record of the promotional calendar.

The architectural answer is slower and more durable. It means deciding what each pack is for, which shopper it serves, what premium it can carry against the specific own label tier next to it, and then holding that structure through the promotional calendar rather than letting the calendar define it.

Circana's own conclusion pointed the same way. With margins already squeezed, national brands need to look closely at how they are structured to compete, rather than simply competing harder on price.