Beyond the price war: the new battle for assortment

Welcome to the second edition of Retail Best Pricing.

For years, retail competition has focused on one big question: who has the best price?

That question still matters. But the battle is getting wider.

Private labels reached 40% of grocery sales value across the EU-11 in 2025. McKinsey also found that European grocers leading in private brands had a 2 to 3 times higher chance of gaining market share than other grocers in their countries. At the same time, 70% of retail executives surveyed by Deloitte plan to expand their value-priced assortments.

These figures show that price is no longer the only competitive tool. Retailers also need the right products: the right brands, the right private labels, the right exclusivities and the right level of choice.

Welcome to the assortment war.

Sources: McKinsey & EuroCommerce, The State of Grocery Retail Europe 2026; Deloitte, 2026 Global Retail Industry Outlook.

1Private labels are changing the battle

Private labels are no longer just cheaper alternatives to national brands. They are becoming a major part of retail strategy.

In Western European grocery, private labels now represent 44% of all new product launches, new varieties and range extensions. In food categories, the figure reaches 70%. McKinsey analysed 120 European grocers over six years: the share and perceived quality of their private brands were among the most important drivers of market-share gains — a stronger driver than price alone.

This does not mean price is becoming less important. In the same 2026 study, 46% of European grocery consumers said they were still looking for additional ways to save money. The message is more complex: retailers now need to compete on price and on what they sell.

Source: McKinsey & EuroCommerce, The State of Grocery Retail Europe 2026; Europanel; NIQ; McKinsey Consumer Survey 2026, n=14,563.

2The same battle is now happening beyond food

The same logic can be seen in non-food retail. Kingfisher is a good example. The group operates brands such as B&Q, Castorama, Brico Dépôt and Screwfix across Europe.

Its own exclusive brands now generate £5.5 billion in sales and represent 43% of group sales — products only available through Kingfisher's own retail brands. That creates differentiation and reduces direct comparison with competitors.

But Kingfisher is also moving in the opposite direction at the same time: its marketplaces now give customers access to more than 6 million SKUs. One strategy makes the assortment more exclusive. The other makes it much wider. Both are being used by the same retailer.

Source: Kingfisher, FY 2025/26 results and company data.

3Marketplaces are rewriting the assortment rules

Retailers have found another way to expand their assortment: open their websites to third-party sellers. The scale is becoming significant.

Kingfisher, Decathlon and Douglas operate in very different sectors, but the logic is similar: a retailer can add many more products without buying all of them, holding all of them in stock or managing the full supply chain itself. There is a trade-off — third-party products may compete with products sold directly by the retailer — but the retailer gets more choice for its customers and a new source of revenue.

Sources: Decathlon Marketplace, 2026; Douglas Group Investor Presentation, 2025.

4Price war or assortment war? Retailers are now fighting both

The data show that the price war is not disappearing. 46% of European grocery consumers are still looking for more ways to save money. But retailers are not answering this need with price cuts alone.

70% of retail executives surveyed by Deloitte plan to expand their value-priced assortments. Private labels already represent 40% of grocery sales value across the EU-11. Kingfisher generates 43% of its sales from its own exclusive brands, while giving customers access to more than 6 million marketplace SKUs. Decathlon's marketplace reached around €500 million in business volume in 2025.

These are different strategies. But they all aim to give customers a stronger reason to choose one retailer instead of another. Price is still one answer. Assortment is now another.

Sources: McKinsey & EuroCommerce 2026; Deloitte 2026 Global Retail Industry Outlook; Kingfisher FY 2025/26; Decathlon Marketplace 2026.

5Pricing Fight Club: EDLP vs High-Low

Two pricing strategies have competed for decades. EDLP (Everyday Low Price) means keeping prices low and stable, with fewer major promotions. High-Low means higher regular prices combined with frequent promotions. Both models have strong arguments.

But NIQ sees a warning sign: promotional pressure is increasing across Western Europe, while the extra volume generated by promotions is slowing. More promotions do not automatically create more growth. The data do not point to one simple winner — the best pricing model may depend on the product, the customer and the moment.

Sources: McKinsey, The State of Grocery North America 2026; NIQ, State of Price & Promo Western Europe 2026.

6When your next customer isn't human

A new form of retail is emerging: agentic commerce. AI agents can search for products, compare offers and help consumers decide what to buy. Retailers expect this change to happen quickly.

Deloitte also reports that 9 in 10 retail executives expect AI to be increasingly used instead of traditional search engines. Today, retailers mainly build their offers for human shoppers. Tomorrow, products may also need to be found, understood and compared by AI agents — which could have a direct impact on both price and assortment.

When an AI agent helps choose what to buy, how will it judge your price — and your assortment?

Source: Deloitte, 2026 Global Retail Industry Outlook.

Conclusion

Price remains essential. But retailers increasingly compete on private labels, exclusive products, marketplaces, promotions, availability and assortment too. Competitive intelligence may therefore need to change with them.

The next step may not be to monitor more prices. It may be to understand more of what your competitor is doing.

Retail Best Pricing is an independent retail pricing community. Published on PAARLY.com with permission from Retail Best Pricing. © Retail Best Pricing.