The CLV Blind Spot: The Growth Number Most SMEs Never Look At

Across Europe's six largest grocery markets — France, Germany, Italy, the Netherlands, Spain and the UK — private label just reached a record 50% unit share, its fifth consecutive year of gains. Over the same period, branded products were on promotion for 34% of unit sales. Private label's promotion rate was 14%. Brands are discounting more than twice as hard as their private-label competitors, and still losing ground.

The US data tells the same story with a sharper edge. Private label hit a record 23.8% unit share this year, according to Circana data cited in a Private Label Manufacturers Association report. National brand unit sales fell 0.5% year-over-year, while private label units grew 0.2%. National brand dollar sales did grow — 2.2% — but that's price increases doing the work, not volume. And according to Zappi's consumer research, loyalty to national brands alone dropped from 21% to 10% in under a year. Nine in ten shoppers say they've changed how they shop because of rising costs.

Kevin coaches SME owners across 30-plus industries, and he wants to flag the instinct this data usually triggers, because it's the wrong one.

When private label pressure shows up in the numbers, most owners reach for the lever closest to hand: price. Run a bigger promo, deepen the discount, protect volume this quarter. It feels like action.

But the data above shows that lever is already maxed out and failing. Branded products are being promoted at more than double the rate of private label, and private label is still taking record share. Whatever brands are currently doing on price, it isn't working — it's just eroding margin while the share loss continues.

Discounting doesn't rebuild loyalty. It borrows this month's sale against next year's margin, and it trains your best customers to wait for the markdown instead of paying for the brand. Every promotion you run resets the price your customer thinks is fair — and the next full-price purchase gets a little harder to make.

This is the same pattern Kevin sees in strategy sessions with SME owners across every category, not just FMCG. Under competitive pressure, the fastest response is a price response, because it doesn't require rebuilding anything — it just requires a lower number. It also happens to be the response that does the most long-term damage for the least short-term gain.

The stat that should worry FMCG owners most isn't the unit-share number — it's the loyalty number. Loyalty to national brands alone falling from 21% to 10% in under a year isn't margin bleeding, which you can recover in a good quarter. It's the underlying asset bleeding out — the relationship that let you charge a premium in the first place.

Once a customer stops seeing your brand as worth a premium and starts seeing it as one option among several at a price point, that trust is slow and expensive to rebuild. It doesn't come back because you ran one more promotion. It comes back because you gave the customer a reason to choose you that has nothing to do with price.

This is exactly the kind of decision the Simple-Growth System™ is built to force out of the gut and onto a page. Kevin takes clients through three moves when private label — or any low-cost competitor — is applying pressure:

Price by SKU, not by instinct. Know the actual price elasticity of each product before you touch the price. Some SKUs can absorb a small increase with no volume loss. Others can't take a 5% discount without you giving away margin the customer was never asking for.

Build a price-pack architecture. Different pack sizes, formats and price points for different shopper missions and occasions — instead of one product on one blanket promotion, competing on the single dimension private label is built to win.

Make every promotion targeted, not blanket. Use loyalty data and retail data to put a discount in front of the customer who needs it to convert — not in front of every customer, including the ones who would have paid full price anyway.

Do this before you touch next quarter's promotional calendar: pull the list of every SKU currently on recurring discount, and ask what each one is actually buying you — volume, share, or just a smaller margin on a sale you were going to make anyway. Most owners find at least a third of their promotions fail that test.

Stop competing with private label on its terms.

Kevin works with SME owners across 30-plus industries to build the pricing and growth systems that protect margin instead of trading it away — the discipline behind the Simple-Growth System™. If your promotional calendar is doing more work than your pricing strategy, you can fix that. Get in touch with Simple-Growth.

Audit every recurring discount before next quarter, and you become the owner whose pricing protects your margin instead of trading it away.