How do private labels compete?

This study examines how buyers of one private label brand (PL) in a product category also buy the private label brands of competing retailers in the same category. The study addresses this question type: Does buying the private label brand Tesco cola heighten or lower the likelihood that a consumer will also buy Sainsbury or Asda cola over time? Examination of consumer crosspurchasing of brands in ten product categories shows heightened competitive intensity among the private label brands in the majority of cases. The findings build on prior work on the purchasing patterns of PL brands, and also the stream of research on the 'private-label prone shopper'. The results indicate that PLs compete against national brands (NBs) within the store, but also compete against the PLs of other retailers (across stores) over time. Indeed in many cases the PLs of various retailers form a type of sub-market or partition, within which the PLs compete against each other to a greater extent than they do against the other NBs in the market.