Private Label Strategy

SIX

Creating Successful Private Labels Is About More Than Just Price

Manufacturer brands’ price premium if quality is at par with private labels: 37 percent

AS THE PREVIOUS CHAPTERS DEMONSTRATE, there is considerable variety in private labels. However, except for a few “premium priced” private labels mostly in the food category, private labels overwhelmingly still sell at a discount to major manufacturer brands. Thus, industry wisdom holds that private labels sell on price.

It is undeniably true that buying private labels helps consumers save money. A telling illustration is that an Internet search on “Buying private labels saves money” yielded 13.9 million hits!¹ This has led managers in both retail and manufacturer organizations to believe ...