Private Label vs. National Brands: two pricing strategies
Private labels and national brands have different cost structures and roles on the shelf. Private labels will account for 45.5% of volume in France in 2025 (35.6% by value, NielsenIQ), but national brands will regain momentum in 2026 (+1.9% in units vs. +1.8% for private labels). Managing both with the same margin thresholds distorts the profitability picture; the cross-elasticity between the two should be measured, not assumed.
On the same shelf, just a few centimeters apart, a private-label brand and a national brand do not follow the same economic logic. Managing both with the same margin thresholds, the same KPI framework, or the same price-adjustment schedule is like trying to measure two different realities with a single tool.
This guide explains why this confusion is costly and how to develop truly differentiated pricing strategies.
Two products, one shelf, two business models
- National brand, brand awareness built through advertising, often lower profit margins per unit. Massive marketing investment, presence across multiple retail chains, plays a role in driving traffic and building consumer confidence.
- Private label, streamlined cost structure, direct role in price-image. No comparable in-house marketing investment; exclusive to the retailer.
- Role within the aisle: two complementary, non-competing functions—the national brand builds trust and attracts customers, while the store brand shapes the overall price perception of the aisle.
What the French Market Figures Reveal
45.5% is the market share of private-label products by volume in France in 2025 (35.6% by value), their highest level in recent years—a level that nevertheless remains below the Western European average of nearly 48% (NielsenIQ, as reported by LSA, 2025).
+1.8% is the growth rate for private-label brands in units sold in 2025, driven in particular by the premium private-label segment (+2.1%), while national brands are also regaining momentum, with a 1.9% increase in units over the same period (NielsenIQ, 2026).
Why a One-Size-Fits-All Pricing Rule Skews Profitability Analysis
Applying the same target margin threshold—or the same KPI selection criteria—to a category that mixes private labels and national brands produces a misleading picture. A category where private labels account for a large share will automatically show a more favorable average “ Markup ,” without this reflecting a true difference in management performance. A customer compares the price of a national brand across different retailers; they rarely compare the price of a private label, since it is available only at a single retailer (see also the section on food retail). Private labels are, in fact, the natural domain of target pricing: the retailer sets its price relative to the national brand, then determines the target purchase cost.
At Booper, the module Pricing Analytics allows you to analyze price and margin performance by breaking down each category by product type (private label, national brand, premium brand) rather than relying on a department-wide average. Discover the solution at Pricing Analytics.
Developing differentiated pricing rules
- Set separate margin targets by brand type, rather than a single category-wide target.
- Identify the KVIs separately for each family; the monitored core varies depending on the nature of the brand.
- Never publish a margin metric without breaking it down by brand type.
Cross-elasticity: The Link We Often Overlook
Private-label and national brands within the same product category are not mutually exclusive: a price increase for one often shifts part of the demand to the other. This substitution effect should be measured rather than assumed. Ignoring this cross-elasticity leads to inconsistent decisions.
The Most Common Mistakes
- Set a single margin target per category, without breaking it down by private label and national brands.
- Apply the same KVI logic to both families.
- Ignore cross-elasticity when there is a price change for one of the two product families.
- Treating private-label positioning as a rigid rule (“always cheaper”), without taking into account the specific segmentation of each retailer.
- Compare the performance of two categories without taking into account their respective mix of private-label and national-brand products.
Private labels and national brands are not two versions of the same product; they represent two distinct business models that coexist on the same shelf. To objectively analyze the margin breakdown of your key categories, explore our pricing strategy development services.
FAQ
National brands invest heavily in marketing and recoup those costs through pricing that reflects that investment, often resulting in a lower profit margin per unit. Private-label brands have a leaner cost structure and generally generate a higher profit Markup .
Their roles on the shelf differ: the national brand attracts customers through its name recognition, while the private label directly shapes the price-image. Managing them the same way distorts the profitability analysis.
According to NielsenIQ, approximately 45.5% of volume and 35.6% of revenue in 2025—a level below the Western European average (~48%).
By setting separate margin targets, identifying the KPIs for each product family separately, and modeling the cross-elasticity between the two.
Not automatically, but it is a common substitution effect that should be modeled rather than assumed.
This is the most common positioning strategy, but it is not a hard-and-fast rule: some premium private-label brands deliberately position themselves close to national brands.
The three follow different strategies: the national brand serves as a price benchmark, the private label protects the margin with a controlled price spread, and the entry-level price defends the entry-level price image. Manage the price differentials among the three rather than each price in isolation.
See also in this feature
- Private Label: Meaning and Definition of a Private Label
- Pricing in the Retail Sector: What's Changing (and What Isn't)
- Pricing in the Food Retail Industry: Balancing Margin and Price Image product by product
Sources: NielsenIQ, as reported by LSA · NielsenIQ, 2025 Consumer Goods Market Outlook · Booper × Coopérative U Business Case.
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This comparison evaluates Optimix XPA, PricingHUB, Mercio, Yieldigo, and BOOPER based on what truly sets a pricing solution apart in France: native support for French regulations, pricing by store or by zone, the approval process before a price changes at the register, and roadmap independence.
A manufacturer that raises its list price does not set the price on the shelf. Between the negotiated list price and the displayed price lie the retailer, its markup, and its promotions. What is measured is the price elasticity of each product, retailer by retailer.