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Confirming the price effects of private labels development

Author

Listed:
  • Bontemps, C.
  • Orozco, V.
  • Réquillart, V.

Abstract

We study the price response of national brands to the development of private labels. We use monthly data from a consumer survey reporting their purchases for 218 food products. We show that when private labels have a significant effect on national brands prices (144 cases over 218), that is positive (89%). We also show that the increase in the prices of 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. This paper confirms, on a larger number of products, previous empirical results. ...French Abstract : Les auteurs étudient la réponse en prix des producteurs de marques nationales au développement des marques de distributeurs. Ils utilisent des données mensuelles d'achats issues d'un panel de consommateurs, concernant 218 produits alimentaires. Ils montrent que le développement des marques de distributeurs a un effet significatif sur les prix des marques nationales (144 cas sur 218), qui est positif (89%). Ils montrent aussi que l'augmentation des prix des marques nationales est, en partie, expliquée par une stratégie de différenciation des producteurs de marques nationales. Enfin, la réaction en prix des marques nationales est différente suivant le type des marques de distributeurs. Ce papier confirme, sur un plus grand nombre de produits, nos précédents résultats empiriques.

Suggested Citation

  • Bontemps, C. & Orozco, V. & Réquillart, V., 2005. "Confirming the price effects of private labels development," Economics Working Paper Archive (Toulouse) 200506, French Institute for Agronomy Research (INRA), Economics Laboratory in Toulouse (ESR Toulouse).
    • Handle: RePEc:rea:inrawp:200506
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    File URL: http://www.toulouse.inra.fr/centre/esr/wpRePEc/bon200506.pdf
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    2. Zhuang, Yan & Dimitri, Carolyn & Jaenicke, Edward C., 2010. "Price Reactions And Organic Price Premiums For Private Label And Branded Milk," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116388, European Association of Agricultural Economists.
    3. Castellari, Elena & Moro, Daniele Daniele & Platoni, Silvia & Sckokai, Paolo, 2014. "Investigating the impact of Private Labels on National Brand prices in the Italian yogurt market," 2014 Third Congress, June 25-27, 2014, Alghero, Italy 173020, Italian Association of Agricultural and Applied Economics (AIEAA).
    4. Cotterill, Ronald W., 2006. "Antitrust analysis of supermarkets: global concerns playing out in local markets," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(01), pages 1-16, March.
    5. Marta Arce-Urriza & Javier Cebollada, 2018. "Assesing the success of private labels online: differences across categories in the grocery industry," Electronic Commerce Research, Springer, vol. 18(4), pages 719-753, December.
    6. Markus Lampe & Paul Sharp, 2014. "Greasing the wheels of rural transformation? Margarine and the competition for the British butter market," Economic History Review, Economic History Society, vol. 67(3), pages 769-792, August.
    7. Stefan Hirsch & Giulia Tiboldo & Rigoberto A. Lopez, 2018. "A tale of two Italian cities: brand-level milk demand and price competition," Applied Economics, Taylor & Francis Journals, vol. 50(49), pages 5239-5252, October.
    8. Ion ANGHEL & Anca Maria HRISTEA, 2018. "Private brand – differentiating concept and source of stimulation of the Romanian retail trade," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(616), A), pages 5-24, Autumn.
    9. Fabian Bergès & Philippe Bontems & Vincent Réquillart, 2009. "L'impact économique du développement des marques de distributeurs," Economie & Prévision, La Documentation Française, vol. 0(3), pages 41-56.
    10. Sckokai, Paolo & Soregaroli, Claudio, 2006. "Do consumers benefit from private label development?," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10068, European Association of Agricultural Economists.
    11. Castellari, Elena & Moro, Daniele & Platoni, Silvia & Sckokai, Paolo, 2018. "Retailers’ strategies and food price dynamics: Evidence from dairy scanner data," Food Policy, Elsevier, vol. 74(C), pages 212-224.
    12. 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.
    13. Timothy J. Richards, 2017. "Analysis of Umbrella Branding with Crowdsourced Data," Agribusiness, John Wiley & Sons, Ltd., vol. 33(2), pages 135-150, April.
    14. Hsiao, Lu & Xiong, Hui, 2022. "Store brand introduction, retail competition and manufacturers’ coping strategies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).

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    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

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