People
Andy Searle
EMEA Leader, Consumer Products, Partner & Managing Director
London
The European consumer goods industry is running out of room to hide behind price.
By 2025, value growth across the four largest Western European markets, France, Germany, Italy and the UK, was almost entirely price-driven, with category volumes flat or in decline. Pricing has effectively run its course. The next wave of growth will have to come from something harder, and over a longer horizon: winning consumers back through innovation, sharper portfolios, and flawless execution.
Why pricing is hitting a ceiling
The data tells a stark story. In nominal terms, the average price of a consumer goods unit in Western Europe is now roughly 36% higher than in 20201, compressing close to a decade's worth of typical price increases into just five years. The pricing lever is effectively exhausted.
Volumes, meanwhile, are only around 1% above 2020 levels. Nearly all value growth has come from pricing, not from genuine demand. And in the four largest markets the picture is sharper still: cumulative price growth between 2020 and 2025 reached 25% in France, 27% in Italy, and 32% in both Germany and the UK, while volumes contracted year after year1. Even where they have stabilised, the recovery is fragile. French and Italian volumes turned just +0.2% positive in 2025; German volumes are still negative; UK volumes slipped back to -0.4% even as prices continued to climb.
The most telling signals are behavioural. Private label has crossed a 50%-unit-share threshold across the largest European grocery markets: 52% in the UK and Germany, 46% in France, 36% in Italy2. In the UK, own-label hit a record 52.3% of grocery sales as early as January 20253. In AlixPartners' own 2026 Global Consumer Outlook, European shoppers reported the most negative spending intent of any developed market: -33 in France, -21 in Germany, -20 in the UK, -17 in Italy4. The most price-sensitive consumers are not waiting for deals. They are walking away from brands.
Pricing is largely spent. Several structural patterns show up:
- Portfolios are too broad, spreading scarce resources across too many SKUs that excite neither shopper nor retailer.
- Pack-price architectures designed for pre-inflation baskets no longer match how European shoppers buy across hyper, super, discount, proximity and e-commerce.
- Trade investment is rising, UK promotional spend alone reached 27.2% of grocery sales in January 20253, without rebuilding share against private label, and increasingly at the expense of brand-building.
- Innovation pipelines have thinned just as own-brand has filled the gap with health, protein, sustainability and premium credentials.
What's needed now is a more systematic, volume-oriented growth engine, not another round of tactical price moves.
How to reignite volume-led growth in Europe
Five tightly linked elements, recalibrated for European realities, set the agenda: a denser discounter landscape, higher private-label penetration, stricter nutritional and promotional regulation in the UK and France, and the structural power of pan-European retail buying alliances.
1. Growth strategy
The starting point is a clear view of where the business will play for volume, not just value. Few European categories will deliver volume growth organically, so strategy has to make explicit choices: which categories, occasions, channels and consumer segments represent sustainable unit growth, and which should be managed for cash or exited. In Europe, that means tracking penetration, frequency and repeat by retailer cluster (Tier 1 multiples, discounters, proximity / convenience) because the economics and the shopper differ profoundly across the three.
2. Portfolio and price pack architecture (PPA)
PPA puts strategy to work on the shelf. European baskets are small and frequent, and shoppers compare pricing closely, particularly in France, Italy and the UK. Overly broad portfolios must be simplified around their strongest brands. Pack-price architecture should be redesigned around three jobs: credible entry tiers that don't surrender ground to private label; trade-up packs for shoppers willing to pay more; and channel-specific formats, including a deliberate plan for discount, where many European CPGs still under-invest.
3. Innovation
Innovation is the fuel that keeps the engine running, but product innovation alone is no longer enough in Europe. The categories growing units are those that pair a genuine reason to buy (higher protein, functional benefits, better-for-you, plant-based, premium home care, convenience formats) with renewed investment in brand and consumer connection. National brands that have de-prioritised brand-building in favour of trade and price investment have left themselves only the rational case to defend, and they cannot win it. The regulatory bar is also higher: UK restrictions on the promotion of products High in Fat, Salt and Sugar (HFSS)5, nutrition rules in France, and tighter e-marketing rules mean innovation must be both nutritionally credible and commercially executable. 'Me-too' line extensions will not carry their weight.
4. Trade terms and promotion effectiveness
Trade investment is, by some margin, the single biggest reset opportunity for most CPG portfolios, and the focus needs to move beyond price promotion to the full trade terms package. The more European brands have spent on trade, the less it has worked. Deeper deals, richer listing fees and broader retailer support have not bought back lost share from private label. France's Loi Descrozaille has tightened promotional rules on food; German discounters have made everyday-low-price the default; Italian retailers are using trade leverage as a strategic weapon. The opportunity is to rethink the entire architecture (promotional depth and frequency, listings, joint marketing funds, payment terms, in-store support) through the lens of incrementality and brand health, not legacy commitments.
5. Salesforce and customer execution
Salesforce and customer execution turn plans into reality. European retail is highly concentrated and growing more so, with pan-European buying alliances now negotiating jointly across multiple markets. Retailers are increasingly explicit: they will reward suppliers who bring a category-growth case and an innovation roadmap, and they will progressively de-list those who bring only price. Volume-led joint business plans, grounded in incremental units, shopper value and category growth, earn the shelf space, visibility and data support that pricing concessions never will.
From narrative to execution
This is not a short-term, single-function programme. Sustainable volume growth in Europe requires cross-functional alignment across commercial, brand and marketing, RGM, R&D, supply chain and finance, and an enterprise-wide vision owned at the executive committee, not delegated to a single function. Pricing was a tool any one team could pull. Volume is not. The companies that succeed will treat this as an 18-to-36-month transformation rather than a quarterly project, and will resource it accordingly.
In a Europe of persistent inflation pressure, geopolitical and tariff uncertainty, fragmented but consolidating retail, and a structurally cautious consumer, the companies that will outperform are those that rebuild their businesses around sustainable volume growth, not just another turn of the pricing screw.
What this means: for brands, for retailers, for suppliers
For brand owners. The pricing-led playbook is largely closed. The next decade will reward companies that pair sharper portfolios and credible innovation with renewed investment in brand and consumer connection, and that align commercial, marketing and supply behind a single enterprise vision for volume growth. Branded CPGs that continue to substitute trade investment for brand-building risk ending up with neither volume nor brand equity to defend.
For private label retailers. The 50%-unit-share milestone is the start of the next race, not the end of this one. The retailers that win the next decade will move PL ranges decisively from value to brand-led, with emotional connection, premium credentials, an innovation cadence and consumer trust to match the rational case PL has already built. The race against branded CPGs has been won on price. The race ahead will be won on brand.
For suppliers to brands and to private label. The dual-track world is here to stay, and it will tighten. Co-manufacturers and ingredient, packaging and contract suppliers serving both branded customers and PL programmes need to be explicit about what each path means for capital allocation, capacity, innovation pipelines and margin structure. Suppliers that commit deliberately to one track, or that actively manage the trade-offs between both, will outperform those that hedge by default.
References
1. Euromonitor International, Passport database (Western European and country-level YoY price and unit growth, 2020-2025), 2026. https://www.euromonitor.com/our-expertise/passport
2. Circana, 'Private Label Reaches Record 50% Unit Share Across Europe's Six Biggest Grocery Markets' (April 2026). https://www.circana.com/post/private-label-reaches-record-50-unit-share-across-europe-s-six-biggest-grocery-markets
3. Kantar Worldpanel by Numerator, UK Grocery Market Share, January 2025. https://www.kantar.com/uki/inspiration/fmcg/2025-wp-healthier-choices-drive-supermarket-spending-as-new-year-gets-underway
4. AlixPartners, 'Spending, Disrupted: 2026 Global Consumer Outlook' (December 2025). https://www.alixpartners.com/newsroom/2026-global-consumer-outlook-press-release/
5. UK Government, 'Restricting promotions of products high in fat, sugar or salt by location and by volume price.' https://www.gov.uk/government/publications/restricting-promotions-of-products-high-in-fat-sugar-or-salt-by-location-and-by-volume-price
