The influence of conflict with suppliers on retailers’ private label performance

Purpose: The purpose of this study is to develop and empirically test a model investigating the relationship between conflict with private label (PL) suppliers and retailers’ PL performance. The study also examines differences in the relationship based on two PL types, namely, price-oriented and differentiation-oriented PLs. Design/methodology/approach: Hypotheses were tested using structural equation modeling and data obtained from a survey of general merchandise managers in 190 supermarket chains in Japan. Findings: The results indicate that conflict with PL suppliers can have negative effects on retailers’ PL performance. Moreover, the use of price-oriented PLs leads to higher levels of conflict with PL suppliers than the use of differentiation-oriented PLs. Practical implications: This study offers managerial insights into the importance of sophisticated conflict management in relation to PL suppliers and the efficacy of premium PLs, which may cost less in terms of conflict management than price-oriented PLs. Originality/value: Considering the influence of conflict with suppliers on retailers’ PL performance, this study suggests a novel approach to examining conflict between PL suppliers and retailers by classifying PLs into two types, namely, price-oriented and differentiation-oriented PLs.