Private Labels
Private labels are an important part of the German retail landscape. Currently, they reach a market share of 30 percent in FMCG categories and still continue to grow. They are successful because they are cheap purchase alternatives which are increasingly marketed with good quality levels, attractive packaging and media support. In light of the average price gap between private labels and national brands, which equals 46 percent in Germany, it is no wonder that more and more consumers prefer private labels over national brands. From a retailer’s perspective, however, the large price gap raises the question whether profit potentials are fully exploited. It is reasonable to expect that not only consumers’ acceptance of but also their willingness to pay for private labels has increased during the last years. Therefore, the project “Private Labels” focuses on consumers’ willingness to pay for private labels. It is the aim of the study to identify optimal price differences between private labels and national brands and to research their drivers. Of particular interest is the analysis of brand, retailer and category characteristics and their impact on consumers’ willingness to pay for private labels. The study is based on a large consumer survey conducted by the Hans Strothoff Chair of Retailing in Germany. The survey yielded 3000 interviews which are used for benchmarking and scenario analyses. The insights generated by the study are valuable for retailers and manufacturers who seek ways to establish and improve a value-based price and brand management.
Contact: Dipl.-Kffr. Salome Nies
