Analyzing the intensity of private label competition across retailers

Examining how buyers of one private label (PL) in a product category also cross-purchase the private labels of competing retailers in the same category is the focus of this study. Understanding consumer cross-purchasing of PLs is important to retailers, who use PLs as one tactic to differentiate from other retailers; and important to manufacturers, who compete against PLs. A higher level of PL cross-purchasing indicates heightened competitive intensity among the PLs of rival retailers. Results across 27 categories indicate that PLs compete against national brands (NBs) within-store, but also compete against the PLs of other retailers across stores. Heightened competition among the PLs of different retailers occurs in categories with higher purchase frequency; in which the average PL price is well below the average NB price; and in categories with higher levels of manufacturer brand price promotions.