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Price Effects of Private Labels Development

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  • Bontemps, Christophe
  • Orozco, Valérie
  • Réquillart, Vincent
  • Trévisiol, Audrey

Abstract

We study the price response of national brands to the development of private labels. Using monthly data from a consumer survey, we show that prices of national brands increase with the development of private labels. However, we also show that the price increase in national brand products is explained by a strategy of product differentiation. Finally, price reaction of national brands differs with the type of private labels they are facing.
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Suggested Citation

  • Bontemps, Christophe & Orozco, Valérie & Réquillart, Vincent & Trévisiol, Audrey, 2004. "Price Effects of Private Labels Development," IDEI Working Papers 299, Institut d'Économie Industrielle (IDEI), Toulouse.
    • Handle: RePEc:ide:wpaper:2612
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    1. 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.
    2. Gabrielsen, Tommy Staahl & Sorgard, Lars, 2007. "Private labels, price rivalry, and public policy," European Economic Review, Elsevier, vol. 51(2), pages 403-424, February.
    3. André Bonfrer & Pradeep K. Chintagunta, 2004. "Store Brands: Who Buys Them and What Happens to Retail Prices When They Are Introduced?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 24(2), pages 195-218, March.
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