Rising prices are weighing more and more heavily on sales of branded products in supermarkets. In an attempt to cushion inflation, customers opt for the cheapest items, swapping national brand products for private label (private label) products in their baskets. Never had the sales gap between these two categories been as wide as in July 2023, according to the Circana institute. Volume sales of private labels have increased by 4.2% over the past year, while those of national brand items have fallen by 7.3%.

“With more than 11 differential points, the situation is getting tougher for national brands, which suffered in July from both high prices and the weather,” explains Circana. National brands are indeed particularly powerful in time-sensitive categories, such as drinks or ice cream. But the trend at work does not date from the summer heat. Already last January, volume sales of national brand products fell by 8% year-on-year.

The price difference between the two product categories (15% to 20% on average) is a determining factor in explaining this fall. Moreover, it is the entry-level private label products (Eco at Leclerc, Simpl at Carrefour, etc.) that have met with the most success, with sales in volume up 23.3% over one year, compared to just 3.2% for “classic” MDDs. According to the specialist magazine LSA, only 19 of the 75 largest retailers saw their volume sales increase in July.

And the evolution of prices is not likely to stop this trend. Admittedly, inflation is decelerating. It reached 13.6% in July over one year, compared to 15.2% in June and 16% in May. But inflation is slowing less quickly among national brands than among private labels – a consequence of manufacturers’ refusal to renegotiate the prices of their products.

Many distributors were counting on the drop in sales to make their suppliers bend. But to the chagrin of supermarkets, the latter have for the moment most often opted for temporary discounts and promotions to stem the decline in their sales. Danone, for example, agreed to lower the price of 6 Danette references by 18% from July, as did Lesieur that of 20 oil references. But these measures are not intended to be long-lasting, with temporary remissions generally being provided for three months.

Distributors have also helped to encourage this change in the behavior of their customers. They showcase their private label products like never before. The anti-inflation baskets, created at the request of the government, are only made up at Carrefour, Intermarché or Système U of these homemade products. For several months, Carrefour has been applying a method in-store to relaunch the hypermarket, which gives pride of place to its private labels. Among its recipes: reduce the number of references by 10% and increase the exposure of private label products. As a result, these now represent more than 35% of sales at Carrefour. Finally, the price disputes between distributors and suppliers did not help to boost sales for the latter. System U has for example just dereferenced Procter

The downscaling of consumption is also reflected in the collapse of sales of organic products, which suffer from their high prices. In July, they represented less than 4% of sales of consumer products in supermarkets, “a level that had not been reached since August 2018, when the label was in full swing”, recalls Circana. Volume sales of organic products fell by 11.4% over one year, at the same rate as the delisting of organic products by distributors.