CPG Brands Lose Sales as EU Consumers Opt for Store-Brand Items

There’s likely to be a downturn in consumer-packaged goods (CPG) sales due to shoppers opting for cheaper store brands amid inflation and rising food costs.

Own-brand labels have gotten more market share in Europe in the past month, the Financial Times reported Saturday (July 23), and analysts said this goes along with “modest share declines” before 2022.

Some of the things consumers are abandoning included branded yogurt, coffee, ice cream and paper products. Instead, they’re choosing various store-branded versions, and the report noted that analysts are also seeing this trend in salty snacks and frozen meat and vegetables.

Numerous multinational food and household product makers, including Unilever and Danone, will be publishing their first-half results this week. Per the FT, analysts believe that many of them are likely to chronicle lagging sales.

The backdrop to all of this is a cost of living crisis, and the owners of various global brands have had to boost their prices as the costs rise for commodities, labor and transport.

Consumer multinationals in the first quarter of the year said they raised prices by a typical 5% year over year, and the upcoming results will show if they were able to pass on further cost increases to households without seeing a loss in sales.

Rising costs are impacting both businesses and consumers, and PYMNTS recently wrote that some U.S. retailers, like Kroger, are identifying opportunities to provide customers with lower-cost alternatives.

Read more: Kroger Boosts ‘Home Chef’ Meal Prep As Restaurant Take Out, Delivery Slump

Kroger recently expanded its capacity for Home Chef-branded ready-made meal kits, offering cost-conscious consumers an alternative to more expensive takeout meals.

The company is also opening a new production center for the meal kits, which will be based in Douglasville, Georgia. Home Chef CEO Erik Jensen said the idea was to “make our production and distribution even more efficient, so we can continue to bring fans easy, delicious recipes.”

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