IDEAS home Printed from https://ideas.repec.org/a/eee/joreco/v20y2013i2p147-153.html
   My bibliography  Save this article

Proliferation of private labels in the groceries sector: The impact on category performance

Author

Listed:
  • Olbrich, Rainer
  • Grewe, Gundula

Abstract

In consumer goods retailing, an increase in private labels on offer has been evident for several years now. Therefore, the purpose of this paper is to analyse how retailer assortment-policy measures and pricing-policy measures to promote the sales of private labels will affect the level of category performance. The findings, based upon POS scanning data from the German groceries sector, are at first view surprising since extending the range of private labels and reducing that of national brands does not lead to greater category performance. The paper offers important retailing, managerial and welfare economics implications of the findings.

Suggested Citation

  • Olbrich, Rainer & Grewe, Gundula, 2013. "Proliferation of private labels in the groceries sector: The impact on category performance," Journal of Retailing and Consumer Services, Elsevier, vol. 20(2), pages 147-153.
    • Handle: RePEc:eee:joreco:v:20:y:2013:i:2:p:147-153
    DOI: 10.1016/j.jretconser.2012.10.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969698912001245
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jretconser.2012.10.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cotterill, Ronald W & Putsis, William P, Jr & Dhar, Ravi, 2000. "Assessing the Competitive Interaction between Private Labels and National Brands," The Journal of Business, University of Chicago Press, vol. 73(1), pages 109-137, January.
    2. Serdar Sayman & Stephen J. Hoch & Jagmohan S. Raju, 2002. "Positioning of Store Brands," Marketing Science, INFORMS, vol. 21(4), pages 378-397, June.
    3. Jarvis, Cheryl Burke & MacKenzie, Scott B & Podsakoff, Philip M, 2003. "A Critical Review of Construct Indicators and Measurement Model Misspecification in Marketing and Consumer Research," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 30(2), pages 199-218, September.
    4. Robert L. Steiner, 2004. "The Nature and Benefits of National Brand/Private Label Competition," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 24(2), pages 105-127, March.
    5. Murthi B. P. S. & Haruvy Ernan & Zhang He, 2007. "The Effect of Variability in Price on Consumer Brand Choice," Review of Marketing Science, De Gruyter, vol. 5(1), pages 1-26, November.
    6. Timothy J. Richards, 2006. "Sales by multi-product retailers," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 261-277.
    7. Koen Pauwels & Shuba Srinivasan, 2004. "Who Benefits from Store Brand Entry?," Marketing Science, INFORMS, vol. 23(3), pages 364-390, July.
    8. Michael B. Ward & Jay P. Shimshack & Jeffrey M. Perloff & J. Michael Harris, 2002. "Effects of the Private-Label Invasion in Food Industries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 961-973.
    9. Anselmsson, Johan & Johansson, Ulf & Marañon, Antonio & Persson, Niklas, 2008. "The penetration of retailer brands and the impact on consumer prices—A study based on household expenditures for 35 grocery categories," Journal of Retailing and Consumer Services, Elsevier, vol. 15(1), pages 42-51.
    10. Pradeep K. Chintagunta & André Bonfrer & Inseong Song, 2002. "Investigating the Effects of Store-Brand Introduction on Retailer Demand and Pricing Behavior," Management Science, INFORMS, vol. 48(10), pages 1242-1267, October.
    11. Vincent R. Nijs & Marnik G. Dekimpe & Jan-Benedict E.M. Steenkamps & Dominique M. Hanssens, 2001. "The Category-Demand Effects of Price Promotions," Marketing Science, INFORMS, vol. 20(1), pages 1-22, September.
    12. Martin Pesendorfer, 2002. "Retail Sales: A Study of Pricing Behavior in Supermarkets," The Journal of Business, University of Chicago Press, vol. 75(1), pages 33-66, January.
    13. Jagmohan S. Raju & Raj Sethuraman & Sanjay K. Dhar, 1995. "The Introduction and Performance of Store Brands," Management Science, INFORMS, vol. 41(6), pages 957-978, June.
    14. Bonanno Alessandro & Lopez Rigoberto A., 2005. "Private Label Expansion and Supermarket Milk Prices," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 3(1), pages 1-18, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zaffou, Madiha & Campbell, Benjamin & Rabinowitz, Adam, 2016. "Spillover Effect of Participation in Women, Infant and Children (WIC) Program on Consumer’s Purchasing Behavior of Private Label Goods," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 230100, Southern Agricultural Economics Association.
    2. Rossi, Patricia & Borges, Adilson & Bakpayev, Marat, 2015. "Private labels versus national brands: The effects of branding on sensory perceptions and purchase intentions," Journal of Retailing and Consumer Services, Elsevier, vol. 27(C), pages 74-79.
    3. Anselmsson, Johan & Bondesson, Niklas, 2015. "Brand value chain in practise; the relationship between mindset and market performance metrics: A study of the Swedish market for FMCG," Journal of Retailing and Consumer Services, Elsevier, vol. 25(C), pages 58-70.
    4. Ratula Chakraborty, 2018. "Do Retailers Manipulate Prices to Favour Private Label over Brands?," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2018-02, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    5. Holzer, Patrick Sebastian, 2020. "The effect of time-varying factors on promotional activity in the German milk market," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    6. Rainer Olbrich & Hans Christian Jansen & Benedikt Teller, 2016. "Quantifying Anti-Consumption of Private Labels and National Brands: Impacts of Poor Test Ratings on Consumer Purchases," Journal of Consumer Affairs, Wiley Blackwell, vol. 50(1), pages 145-165, March.
    7. Hoskins, Jake D., 2016. "Offering value and capturing surplus: A strategy for private label sales in a new customer loyalty building scenario," Journal of Retailing and Consumer Services, Elsevier, vol. 28(C), pages 274-280.
    8. Olbrich, Rainer & Jansen, Hans Christian & Hundt, Michael, 2017. "Effects of pricing strategies and product quality on private label and national brand performance," Journal of Retailing and Consumer Services, Elsevier, vol. 34(C), pages 294-301.
    9. Rainer Olbrich & Michael Hundt & Hans Christian Jansen, 2016. "Proliferation of Private Labels in Food Retailing: A Literature Overview," International Journal of Marketing Studies, Canadian Center of Science and Education, vol. 8(6), pages 63-76, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Raj Sethuraman, 2009. "Assessing the External Validity of Analytical Results from National Brand and Store Brand Competition Models," Marketing Science, INFORMS, vol. 28(4), pages 759-781, 07-08.
    2. Yingjue Zhou & Tieming Liu & Gangshu Cai, 2019. "Impact of In-Store Promotion and Spillover Effect on Private Label Introduction," Service Science, INFORMS, vol. 11(2), pages 96-112, June.
    3. Karsten Hansen & Vishal Singh & Pradeep Chintagunta, 2006. "Understanding Store-Brand Purchase Behavior Across Categories," Marketing Science, INFORMS, vol. 25(1), pages 75-90, 01-02.
    4. Tiboldo, Giulia & Lopez, Rigoberto & Hirsch, Stefan, 2016. "Private label market power: evidence from Italian dairy retailing," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235592, Agricultural and Applied Economics Association.
    5. Sergio Meza & K. Sudhir, 2010. "Do private labels increase retailer bargaining power?," Quantitative Marketing and Economics (QME), Springer, vol. 8(3), pages 333-363, September.
    6. Chi-Cheng Wu & Chih-Jen Wang, 2005. "A Positive Theory of Private Label: A Strategic Role of Private Label in a Duopoly National-Brand Market," Marketing Letters, Springer, vol. 16(2), pages 143-161, April.
    7. Rong Luo, 2018. "Store brands and retail grocery competition," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(4), pages 653-668, October.
    8. Richards, Timothy J. & Hamilton, Stephen F. & Patterson, Paul M., 2010. "Spatial Competition and Private Labels," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(2), pages 1-26, August.
    9. Venturini, Luciano, 2006. "Vertical competition between manufacturers and retailers and upstream incentives to innovate and differentiate," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10050, European Association of Agricultural Economists.
    10. Hans Sebastian Heese, 2010. "Competing with channel partners: Supply chain conflict when retailers introduce store brands," Naval Research Logistics (NRL), John Wiley & Sons, vol. 57(5), pages 441-459, August.
    11. Weimin Ma & Rong Cheng & Hua Ke, 2018. "Impacts of Power Structure on Supply Chain with a Store Brand," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 35(04), pages 1-25, August.
    12. Meilin Ma & Ralph Siebert, 2021. "The Impact of Private Label Introduction on Assortment, Prices, and Profits of Retailers," CESifo Working Paper Series 9380, CESifo.
    13. Jin, Yannan & Wu, Xiaole & Hu, Qiying, 2017. "Interaction between channel strategy and store brand decisions," European Journal of Operational Research, Elsevier, vol. 256(3), pages 911-923.
    14. Balasubramanian, Ganesh & Ponnachiyur Maruthasalam, Arulanantha Prabu, 2021. "Substitution effect of retailer store brand and manufacturer encroachment," International Journal of Production Economics, Elsevier, vol. 239(C).
    15. Choi, Sungchul & Fredj, Karima, 2013. "Price competition and store competition: Store brands vs. national brand," European Journal of Operational Research, Elsevier, vol. 225(1), pages 166-178.
    16. Amrouche, Nawel & Yan, Ruiliang, 2012. "Implementing online store for national brand competing against private label," Journal of Business Research, Elsevier, vol. 65(3), pages 325-332.
    17. Deleersnyder, B. & Dekimpe, M.G. & Steenkamp, J.E.B.M. & Koll, O., 2007. "Win-win strategies at discount stores," Other publications TiSEM 34fbe624-0ee7-4c52-b640-7, Tilburg University, School of Economics and Management.
    18. Timothy J. Richards, 2017. "Analysis of Umbrella Branding with Crowdsourced Data," Agribusiness, John Wiley & Sons, Ltd., vol. 33(2), pages 135-150, April.
    19. Gabrielsen, Tommy Staahl & Sorgard, Lars, 2007. "Private labels, price rivalry, and public policy," European Economic Review, Elsevier, vol. 51(2), pages 403-424, February.
    20. Cheng, Rong & Duan, Yongrui & Zhang, Jianguang & Ke, Hua, 2021. "Impacts of store-brand introduction on a multiple-echelon supply chain," European Journal of Operational Research, Elsevier, vol. 292(2), pages 652-662.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joreco:v:20:y:2013:i:2:p:147-153. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-retailing-and-consumer-services .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.