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Effects of the private-label invasion in food industries

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Author Info

  • Ward, Michael B.
  • Shimshack, Jay P.
  • Perloff, Jeffrey M.
  • Harris, J. Michael

Abstract

Using supermarket scanner data, we test a variety of hypotheses from trade journals about the invasion of private-label food products. According to conventional industry wisdom, name-brand firms defended their brands against new private-label products by lowering their prices, engaging in additional promotional activities, and increasingly differentiating their products. Our empirical evidence is inconsistent with these beliefs.

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File URL: http://mpra.ub.uni-muenchen.de/22186/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 22186.

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Date of creation: Nov 2002
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Publication status: Published in American Journal of Agricultural Economics 4.84(2002): pp. 961-973
Handle: RePEc:pra:mprapa:22186

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Web page: http://mpra.ub.uni-muenchen.de
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Keywords: private label; entry; price; promotional activity; differentiation; supermarket;

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References

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  1. Perloff, Jeffrey M & Salop, Steven, 1984. "Equilibrium with product differentiation," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt4cq0m6s3, Department of Agricultural & Resource Economics, UC Berkeley.
  2. Richard G. Frank & David S. Salkever, 1997. "Generic Entry and the Pricing of Pharmaceuticals," NBER Working Papers 5306, National Bureau of Economic Research, Inc.
  3. Dierker, E. & Dierker, H., 1998. "Product Differentiation and Market Power," Papers 9804, Washington St. Louis - School of Business and Political Economy.
  4. Bontems, Philippe & Monier-Dilhan, Sylvette & Requillart, Vincent, 1999. "Strategic Effects of Private Labels," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 26(2), pages 147-65, June.
  5. Richard G. Frank & David S. Salkever, 1997. "Generic Entry and the Pricing of Pharmaceuticals," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 75-90, 03.
  6. Perloff, Jeffrey M. & Suslow, Valerie Y. & Seguin, Paul J., 1995. "Higher Prices from Entry: Pricing of Brand-Name Drugs," Competition Policy Center, Working Paper Series qt1ts674n2, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
  7. Salop, Steven, 1977. "The Noisy Monopolist: Imperfect Information, Price Dispersion and Price Discrimination," Review of Economic Studies, Wiley Blackwell, vol. 44(3), pages 393-406, October.
  8. Nelson, Philip B. & Hilke, John C., 1991. "Retail featuring as a strategic entry or mobility barrier in manufacturing," International Journal of Industrial Organization, Elsevier, vol. 9(4), pages 533-544, December.
  9. Ronald Cotterill & William Putsis, 2000. "Market Share and Price Setting Behavior for Private Labels and National Brands," Review of Industrial Organization, Springer, vol. 17(1), pages 17-39, August.
  10. Connor, John M. & Peterson, Everett B., 1991. "Market-Structure Determinants Of National Brand-Private Label Price Differences Of Manufactured Food Products," Working Papers 116099, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
  11. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
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  13. Mills, David E, 1999. "Private Labels and Manufacturer Counterstrategies," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 26(2), pages 125-45, June.
  14. Mills, David E, 1995. "Why Retailers Sell Private Labels," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(3), pages 509-28, Fall.
  15. MacDonald, James M, 2000. "Demand, Information, and Competition: Why Do Food Prices Fall at Seasonal Demand Peaks?," Journal of Industrial Economics, Wiley Blackwell, vol. 48(1), pages 27-45, March.
  16. Cotterill, Ronald W. & Putsis, William P., Jr. & Dhar, Ravi, 2000. "Market Share and Price Setting Behavior For Private Labels and National Brands," Research Reports 25209, University of Connecticut, Food Marketing Policy Center.
  17. Kohn, Meir G. & Shavell, Steven, 1974. "The theory of search," Journal of Economic Theory, Elsevier, vol. 9(2), pages 93-123, October.
  18. Hinloopen, Jeroen & Martin, Stephen, 1997. "Market-Structure Determinants of National Brand-Private Label Price Differences of Manufactured Food Products: Comment," Journal of Industrial Economics, Wiley Blackwell, vol. 45(2), pages 219-23, June.
  19. Nijssen, Edwin J & Van Trijp, Hans C M, 1998. "Branding Fresh Food Products: Exploratory Empirical Evidence from the Netherlands," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 25(2), pages 228-42.
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