Monday, April 27, 2009

Branded Stores

Store brands (house brands in the United States, own brands in the UK, and home brands in Australia) are specific to retail stores or store chains. The retailer can manufacture goods under its own label, re-brand private label goods, or outsource manufacture of store-brand items to multiple third parties - often the same manufacturers that produce brand-labeled goods. Store- brand goods are generally cheaper than national-brand goods because the retailer can optimize the production to suit consumer demand and reduce advertising costs. Goods sold under a store brand are subject to the same regulatory oversight as goods sold under a national brand.
In some retail sectors, store brands account for 40 to 50 percent of sales. Store branding is a mature industry; consequently, some store brands have been able to position themselves as premium brands. Sometimes store-branded goods mimic the shape, packaging, and labeling of national brands, or get premium display treatment from retailers. (For example, "Dr. Thunder" and "Mountain Lightning" are the names of the Sam's Choice store brand equivalents of Dr Pepper and Mountain Dew, respectively.)
Some retailers believe that, while advertising by premium national brands brings shoppers to the store, the retailer typically makes more profit by selling the shopper a store brand. This assumption has led to a spurt in the academic and trade literature on the subject of positioning the store brand vis-a-vis the national brand.
In most cases, while store brands are usually cheaper than national (or even regional) brands, they remain more expensive than generic brands sold at the store. (e.g. Pittsburgh-based Giant Eagle selling their store brands for less than national brands but more than Topco's Valu Time generic brand.) The "no-frills" grocery chains primarily, such as Aldi and Save-A-Lot (though most Save-A-Lots do sell limited name brand products, which vary from whoever owns the store), sell store brands to promote overall lower prices, compared to supermarket chains that sell several brands as well as other goods and services.

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