What baby boom? We may have seen a 23% hike in births over the past decade and the national birthrate may be at its highest point since 1971 [ONS], but that hasn’t stopped the nappy market from having a stinker.

The bottom has well and truly fallen out of the £473.8m market, with value down 3% on volumes down 3.9% [Nielsen 52 w/e 12 October]. And if that doesn’t raise eyebrows, given the rate at which we’re reproducing, the performance of Britain’s biggest nappy brand certainly will.

Read The Grocer’s full Top Products Survey.

Pampers has continued to lose value and volume sales, despite its biggest rival, Huggies, making a shock exit from the UK market in October 2012. Pampers has sold a staggering 76.3 million (4.1%) fewer nappies year on year. At least P&G, for whom perhaps the only consolation is that Pampers’ performance represents a slight improvement on the previous year’s, is clear on where much of its lost business is going.

“As we said this time last year, we knew own label would present strong competition and this has been the case,” says a spokesman. “We’re continuing to focus on Pampers’ role in the market to bring the latest technology and innovation to provide the best-performing products for parents.”

The own-label figures make for a sobering read it’s up an impressive 37.3% on volumes up 44.5%. But the fact that own label’s growth hasn’t been enough to put the overall subcategory in the black suggests retailers are failing to capitalise on the baby boom (some suggest savvy parents are switching to online retailers such as Amazon for their nappies).

Not everyone’s missing out, however. Aldi says it has doubled sales of its own-label baby and toddler range in the past year, claiming a 15% own-label share for nappies, which it claims puts it behind only Tesco and Asda. Aldi also reports newborn nappy sales have risen 190% in the past year, helped by on-pack promotions, discount coupons in key parent and baby magazines, and low prices.

” Once brands were best… now mums realise they don’t have to pay a premium for quality”   Spokeswoman, Lidl

“We’re starting to see a switch in mindset with mums and how they make their purchasing decisions,” says an Aldi spokeswoman. “The tough economic climate has forced many to look at alternatives. Once brands were best but they now realise there’s no need to pay a premium price for a good quality product. Previously guided by what their own mums used for reassurance, now many are looking for information online and sharing recommendations with others, removing the guilt of switching to a cheaper version.”

Fellow discounter Lidl has also been one of the most active in NPD. “We’re experiencing a baby boom in the UK at the moment so this is the optimum time to be developing and expanding our range,” says a spokeswoman.

In January, Britain’s biggest retailer launched the Tesco Loves Baby brand comprising updated own-label nappies (including a newborn variant featuring a ‘wetness indicator’ proof of how own label is looking to out-innovate the brands)wipes, toiletries and feeding and weaning accessories. It also plans to expand its mother & baby sections in stores.

And Booker revealed plans to cash in on Huggies’ exit, a move that has seen £50.3m leave the market, with a premium own-label line. The Happy Shopper range was launched in June in five sizes and comes in price-marked packs.

Nappies are not the only area in paper products where own label is treading on brands’ toes. In toilet tissue - a subcategory that’s sacrificed £26.3m in sales (2.4%) in order to push up volumes by 1% - own label is stealing volumes from brands, thanks primarily to a 5.5% decline in average price to 36p a roll, driven primarily by deals. Branded, meanwhile, has declined by 1.7% to 41p.

A koala has never been owed so much. As its rivals cut prices in a desperate bid to maintain volumes, Cushelle’s price has risen 4%. Yet the brand is still in value and volume growth, thanks in part to ads (online and TV) and on-pack promos with the marsupial mascot.

No wonder cheaper brands are prospering. Second-placed Velvet has turned in 6.6% value growth on volumes up 7.9%, aided by a 1.2% decline in average price to 39p. Andrex is the biggest brand in the subcategory and the priciest in the top five, at an average of 46p a roll. It’s seen 4.2% wiped off its value and 3.1% off volumes. Perhaps the greatest proof that price is king is the rise of seventh-placed Superquinn, at 17p a roll. In a year, its sales have gone from under £100,000 to £4.5m.

“With price being forced down by own label and branded products trying to keep up with the price pressure, the average product price has dropped significantly,” says Nielsen analyst Alex Waddingham. “Few changes in the top 50 indicate the market is not driven by innovation and consumers aren’t willing to change from one brand to another, but will change to cheaper own label.”

Own label isn’t having it all its own way in paper products, however. In facial tissues, average prices may be down 2.8% but that doesn’t mean brands are being priced out of the market (the price decline is more or less the same for brands and own label and they’re divided by an average of only 5p a pack). Brands lost £30.6m in sales (0.3%) but boosted volumes by 2.5%, while own label lost 1.5% in value and pushed volumes up by just 1.4%.

However, 56% of all branded volume has been sold on deal in the past year, with much of the promotional activity from Velvet, which upped volume sales by more than 50%, against value growth of less than 9%.

Brands have also been pursuing new products aimed at children, including WorldCart’s Hello Kitty and UP Global Sourcing’s Disney and Peppa Pig, the latter going straight to the 13th spot on the top 50.

Value sales declined for both brands and own label in kitchen towels, despite heavy price promotions from own label, which accounted for nearly 20% of its volumes, with brands forced to follow suit. Intertissue Sofidel’s Regina product was the standout performer, up 47% by value.

“People have been looking for ways to save money and it is apparent in the kitchen towel market that shoppers have been switching to own label or cheaper brands,” says Waddingham. “Premium branded products are in heavy decline.”

Read The Grocer’s full Top Products Survey.

Top Launch: Toujours Drylock Lidl

Discount retailers have been leading the way in terms of nappy innovation. In September Lidl introduced an exclusive range of ultra-thin nappies under its Toujours brand. The patented-design nappies use Drylock technology and are just 3mm thick compared with an average of 8mm. They contain no glue or fluff at the core, and fewer chemicals than usual nappies. Drylock founder Bart van Malderen has described the nappies as being “so thin they’re like underwear”.