Private Labels: A Winning Store Strategy

In the beginning, the retail industry’s target was to offer low prices to consumers thanks to large quantities ordered from wellknown brands, allowing better prices than in traditional retail businesses. Little by little, the part played by retailers (grocery stores) changed and now it has been 30 years since retailers have not only played an ordinary retailer’s role, but are also managers of their own brands, named store brands and more commonly Private Labels (PL). For the great majority of products, one does not only find national brands (NB) on store shelves. Consumers may also purchase the retailer’s brand, which exists in different forms (see frame 1). The first part of this text will concern the economic origin of Private Labels and reveal some of the objectives of retailers with the development of Private Labels. The second part will turn to the consumers, trying to find out their characteristics and choice determinants when buying a PL. Lastly, we shall take an interest in the reaction of well-known brand producers, especially through NB prices, against PL development.