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Strategic pricing of private labels: The role of within-category processed food diversity

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  • Patel, Pankaj C.

Abstract

Drawing on signaling theory and product category theory, we examine how private label pricing per calorie is moderated by processing diversity strategies. Using a novel dataset of the extent of food processing scores by food categories across three major U.S. retailers (Walmart, Target, and Whole Foods), we find that private labels command lower prices per calorie compared to national brands, consistent with their traditional value positioning. However, this relationship is systematically moderated by retailers within the food category and between store food category processing scores in opposing ways. Our analysis reveals a strategic duality in private label pricing: retailers price more competitively when offering diverse processing options within categories, but command premiums when their processing diversity strategy differs from competitors, demonstrating how retailers balance internal portfolio decisions against competitive positioning.

Suggested Citation

  • Patel, Pankaj C., 2026. "Strategic pricing of private labels: The role of within-category processed food diversity," Journal of Retailing and Consumer Services, Elsevier, vol. 88(C).
    • Handle: RePEc:eee:joreco:v:88:y:2026:i:c:s0969698925002917
    DOI: 10.1016/j.jretconser.2025.104512
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