Private label hit 23% in the US and 50% in Europe. Three ways brands are fighting back.
Cutting price to match private label almost never pays back. The Heinz UK numbers show why.
The short version
- In Europe's six biggest grocery markets, private label now takes half of every hundred units sold. In the US it is 23.5 percent and still climbing.12
- The first instinct, a headline price cut or a fighter brand, almost always destroys more margin than it defends. A 40 percent margin brand that cuts price by 17 percent needs 71 percent more volume just to break even, and typical elasticity delivers about half of that.
- Play one: hold the list price and out-invest in the brand. Protect the margin and spend it on the equity and innovation that justify the premium.
- Play two: re-architect price and pack. Defend the exposed entry tier with the right pack and a sharper entry price, and let the hero hold its price.
- Play three: premiumise where private label cannot easily follow, though Walmart's Bettergoods shows even the premium lane is now contested.5
- Heinz UK ran plays one and two from 2023. By 2024 pre-tax profit had nearly doubled to 191.9 million pounds and volumes had steadied to a 0.3 percent decline.4
Private label is no longer the recession story brands wait out. It is half of every hundred units sold in Europe's biggest markets, and a rising quarter in the US. The first instinct, cut the price, is the one move the math almost never supports. Three others do far better.
Private label stopped being a recession story
Private label used to spike in downturns and fade in recoveries. That pattern is gone. In April 2026, Circana reported that across France, Germany, Italy, the Netherlands, Spain, and the UK, private label had crossed 50 percent of units sold for the first time.1 The spread is wide, from 36 percent in Italy to 59 percent in Spain, but the direction is the same everywhere, up every year since 2021. In the US, store brands reached a record 23.5 percent of units in 2025, on 282.8 billion dollars of sales.2
One nuance decides how you respond. In Europe those 50 percent of units are only about 42 percent of the money, because private label sells cheaper.1 Shoppers are buying a lot of own-label units, but the value gap leaves real room for a brand that can justify its price. That room is the whole game.
The move most teams reach for first is the wrong one
When a brand loses share to private label, the reflex is to cut the price and close the gap, or to launch a cheap fighter brand to fight on the bottom shelf. Both usually cost more than they save.
Take the price cut. A brand selling at 1.80 pounds with a 40 percent margin earns 72 pence of contribution a unit. Drop the price to 1.50 to narrow the gap to a 90 pence private label, and the margin falls to 28 percent, or 42 pence a unit. To hold the same total contribution, you now have to sell 71 percent more units. Typical Fast-Moving Consumer Goods (FMCG) price elasticity, around minus 2 to minus 2.5, gives you roughly 33 to 42 percent more. The cut loses money, and it loses it on every loyal shopper who would happily have paid full price.
Why a price cut needs so much extra volume
When you cut a price, every unit now earns less, so you have to sell more just to stand still on total profit. The lower the new margin, the more units you need. The post's example shows this: dropping from 1.80 to 1.50 pounds takes the unit margin from 40 percent to 28 percent, and you suddenly need 71 percent more volume to break even. The trouble is that shoppers do not usually buy that much more when a price falls, so the gap between what you need and what you get is money lost.
The fighter brand has its own trap. The canonical study is Mark Ritson's, which found that most fighter brands inflict little damage on the target and instead cannibalise the parent that launched them.3 You end up funding a cheaper version of yourself.
What a fighter brand is, and why it backfires
A fighter brand is a cheaper, stripped-back product a company launches to fight a low-priced rival on the bottom shelf, while keeping its main brand at full price. The idea is to win back budget shoppers without discounting the hero. In practice it rarely lands a clean hit on the rival. Instead it tends to pull buyers away from the company's own main brand, because some shoppers who were paying full price simply trade down to the new cheaper option. So you fund a discount version of yourself and weaken the brand you were trying to protect.
The three plays that actually work
Hold the list price and out-invest in the brand. This is the strongest long-run defence, and it feels wrong in a price war, which is why so few do it. Protect the margin and spend it on the things private label cannot copy quickly: distinctiveness, innovation, and the meaning that makes a shopper reach past a cheaper pack. It only works if the quality gap is real, so the first job is to confirm that it is.
Re-architect price and pack. You rarely need to touch the hero. The damage usually lands on one exposed flank: an entry tier, a single pack size, a price-sensitive occasion. Defend that flank with the right pack and a sharper entry price inside a good-better-best ladder, and let the hero hold its price and margin. This is surgery, not a blanket cut.
The good-better-best ladder, and the exposed flank
A good-better-best ladder is a range built across price tiers: a simple entry product at the bottom, a mainstream hero in the middle, and a premium option at the top. Private label rarely beats you everywhere. It usually wins on one tier, often the cheap entry pack or a single size where price matters most, and that is your exposed flank. Re-architecting means fixing only that tier, with the right pack and a sharper entry price, while the hero holds its price and margin. It is targeted surgery on the weak point rather than a blanket cut across the whole range.
Premiumise where private label cannot easily follow. Move the brand's centre of gravity up, into formats, occasions, and quality cues that own-label has not reached. The caution, and it is a real one, is that the premium lane is no longer empty.
What it looks like at scale: Heinz UK, 2022 to 2024
Heinz ran the wrong move and the right ones in quick succession, which is what makes it useful. In June 2022, Tesco delisted Heinz Beanz, Tomato Soup, and Salad Cream in a standoff over price increases. The products returned after a settlement in early July.4 Through 2022 and into 2023, Heinz Beanz prices rose by roughly a third year on year, and volumes fell almost 20 percent across 2022 and 2023 combined as shoppers traded into own-label.4
The temptation at that point is to chase the lost volume back with price. Heinz did close to the opposite. It reset the equity. The "Unbeanlievable" campaign ran in early 2023, and in June 2023 the company launched "It Has To Be Heinz," its first unified global brand platform in its 150-year history and its largest media investment to date.4 Alongside the brand work, and according to trade-press reporting, it invested selectively in lower prices on key lines from the second half of 2023, fixing the exposed tier rather than cutting the hero across the board.
The result is the case for the discipline. Heinz UK pre-tax profit nearly doubled to 191.9 million pounds in 2024, up from 104.1 million the year before, and volumes steadied to a decline of just 0.3 percent.4 Hold the brand, fix the exposed flank, and the Profit and Loss (P&L) recovers. Cut the hero across the board, and it would not have.
The newer threat: premium private label
The reason play three carries a caution is sitting in Walmart's aisles. In April 2024, Walmart launched Bettergoods, around 300 products across three tiers, most under 5 dollars, its largest private-brand food launch in two decades.5 Within just over a year, Bettergoods had been bought by 28 percent of US households, and, in ice cream at least, its shoppers were notably less likely to also buy Walmart's value line Great Value than the average ice-cream brand's shoppers.5 That gap is the signal. Premium private label is recruiting the more affluent shopper your hero was built for, not just the budget buyer. The safe upper ground is contested now too, which is why premiumising has to mean genuine distinctiveness, not just a higher price.
What to do this week
Three moves. First, measure your real quality gap to private label on the hero, because play one only works if the gap is genuine and holding. Second, find your one exposed flank, the tier or pack where own-label is actually taking your volume, and fix that with pack and entry price rather than cutting the hero. Third, before anyone proposes a defensive price cut, run the break-even math in front of the room: the volume you would need against the volume elasticity will give you. The number usually ends the conversation.
The brands losing to private label are mostly the ones cutting price to fight it. The brands holding are the ones spending to be worth the premium.
References
- Circana reported in April 2026 that private label reached a 50 percent unit share across France, Germany, Italy, the Netherlands, Spain, and the UK for the first time, ranging from 36 percent in Italy to 59 percent in Spain, with a 42 percent value share for the same six markets. "Private label reaches record 50% unit share across Europe's six biggest grocery markets", Circana, April 2026. circana.com
- US store-brand unit share reached a record 23.5 percent in 2025 (21.3 percent of dollars), on 282.8 billion dollars of sales. PLMA and Circana, January 2026, as reported by Grocery Dive. grocerydive.com
- Mark Ritson, "Should You Launch a Fighter Brand?", Harvard Business Review, October 2009, on how fighter brands tend to cannibalise the parent rather than damage the target. hbr.org
- Tesco delisted several Heinz products in June 2022 over price increases, with a settlement in early July 2022 (Bloomberg). Heinz Beanz prices rose by roughly a third year on year through 2022 and 2023 (The Grocer KVI price tracker), and volumes fell almost 20 percent across 2022 and 2023. Heinz reset its equity with "Unbeanlievable" (early 2023) and "It Has To Be Heinz" (June 2023, its first global brand platform in its 150-year history and its largest media investment to date). Heinz UK pre-tax profit nearly doubled to 191.9 million pounds in 2024, from 104.1 million in 2023, and volumes steadied to a 0.3 percent decline. Bloomberg, 8 July 2022 bloomberg.com; The Grocer KVI tracker, March 2023 thegrocer.co.uk; Kraft Heinz, June 2023 kraftheinzcompany.com; Grocery Gazette, 22 September 2025 grocerygazette.co.uk
- Walmart launched Bettergoods in April 2024, around 300 products and most priced under 5 dollars, its largest private-brand food launch in two decades. Within just over a year it had been bought by 28 percent of US households, and in ice cream its shoppers were about 13 points less likely to also buy Walmart's Great Value line than the average ice-cream brand's shoppers (55 percent versus 64 percent). Walmart and CNBC, 30 April 2024 cnbc.com; Numerator, 2025 numerator.com
Keep going
Pair this with the decision guide and the lessons that build the muscle behind each play above.
More from the blog
Private Label Response (playbook). The full decision tree, with the Heinz UK walkthrough and the premium private-label sidebar as a worked example.
When Matching a Competitor's Price Cut Destroys Value. The same margin arithmetic that rules out the defensive cut here, applied to reactive pricing against branded rivals.
Why 1% More in Price Beats 5% in Volume. The leverage behind play one. The same math, run in reverse, is why a defensive price cut so rarely pays back.
Your Entry Pack Is the Most Under-Managed SKU. Play two in depth. The entry tier is usually the flank private label attacks, and the pack you defend it with.