A private label, also called a private brand or private-label brand, is a brand owned by a company, offered by that company alongside and competing with brands from other businesses. [1] [2] A private-label brand is almost always offered exclusively by the firm that owns it, although in rare instances the brand is licensed to another company. [3] The term often describes products, but can also encompass services.
The most common definition of a private label product is one that is outsourced: company A makes a product for company B, which company B then offers under their brand name. [4] [5] [6] However, it can also define products made in retailer-owned firms. [7] [8] For example, in 2018, The Kroger Company had 60% of its private brands produced by third parties; the remaining 40% was manufactured internally by plants owned by Kroger. [9] Private-label producers are usually anonymous, sometimes by contract. In other cases, they are allowed to mention their role publicly. [10] [11]
The term private label originated in retail, [12] but has since been used in other industries as well. Probably the best known private-label brands are store brands, which are managed by supermarket and grocery store chains. Examples are Simple Truth by Kroger and Great Value by Wal-Mart. [13] Store brands compete with national brands or name brands, like Coca-Cola or Lay's. [14] [15] [16]
The term private-label product overlaps with the term white-label product . They are sometimes used interchangeably, but they don't mean the same thing. A private-label product is created exclusively for a client, who sets specific demands on what the product or service must contain. [17] A white-label product is not created exclusively for one company, and although white-label manufacturers might offer customizations to their products, these are usually limited. [18] The specifications of a private-label product are set out by the client, whereas a white-label product is more generic and already designed. [19] [20]
In the supermarket and grocery store industry, the term private label/brand is almost always used, even if the same product is sold non-exclusively to multiple retailers with different packaging (white label/brand).
A store brand, also called a house brand [22] or, in British English, an own brand, [23] is a private-label brand trademarked and managed by a retailer. [1] This brand is almost always offered exclusively at the chain store that owns it; in rare instances, however, the brand is licensed to another company. [24] Examples of store brands are Simple Truth by Kroger, Great Value by Wal-Mart, Clover Valley by Dollar General, Market Pantry by Target, and Specially Selected by Aldi. [13] [25] Store brands can also be eponymous, or named after the store, such as Joe's O's cereal by Trader Joe's. [26] Store brands compete with national brands, also called premium brands or name brands, [14] [15] [16] with its items sometimes being called brand-name products. [27] Examples are Coca-Cola, Lay's, and Kellogg's. The general appeal of store-brand products is that they are usually offered at a lower price than their name-brand counterparts. [1]
Most private-label store brand products are manufactured by third parties, but some are made by companies owned by the retailer. [8] For instance, a vice-president of The Kroger Company stated in 2018 that approximately 60% of their private-label products are outsourced. The remaining 40% is manufactured internally: in 2018, Kroger owned 38 plants, including 19 dairy farms, 10 bakeries, and 2 butcheries, strategically spread across the US. [9] Similarly, Safeway Inc. owned 32 plants as of 2012. [28] Most retailers prefer to keep the identity of their suppliers private, and accordingly have non-disclosure clauses in their contracts, making it difficult to determine the producer of a private-label product. [10] [11] In a few cases though, the manufacturer is allowed to mention it publicly, [29] is revealed through a product recall, or in rare instances, is stated on the product itself. For example, the bags of Kirkland Signature coffee by Costco feature the text "Custom roasted by Starbucks". [30] [31]
Private-label brands emerged in the 19th century. [12] Until the early 20th century, their general focus was on delivering quality at a price below that of the national brands. In the first half of the 20th century, the quality of private brands diluted and their standards dropped. In their competitive struggle against national brands, low prices were considered more important than quality. In the second half of the century, this trend gradually reversed. [32] As quality and visual appearance improved, private labels rose to prominence in the 1970s and '80s. [33] By the 1990s, they were increasingly seen as a threat to the established brands. [34] Also, from the 1990s onwards, a premiumization of store brands began to occur, [35] giving rise to more expensive premium private labels. [36] [37] A survey conducted by the UK's Groceries Code Adjudicator in 2024 noted that retailers were introducing more own-label products and the adjudicator commented that this trend added to management complexities for suppliers. [38]
Generic brands are often associated with store brands. Generic products were first introduced in the United States in 1977, [39] [40] [41] quickly winning market share from national and private-label brands. [42] A 1981 academic article described them as products "without brand names, in very plain packages with simple labels and usually sold at prices below both the national and private brands with which they compete". [39] Packages of generic products often feature only the name of the type of product it contains, e.g. "Cola" or "Batteries". [40] Nowadays, the terms generic brand and store brand are sometimes used interchangeably. [14] [43] [44] The term generic can be used as a pejorative toward store brand items that are perceived as bland or cheap. [45] [46]
A private-label brand is often produced by the same company that manufactures the national brand of that product. [47] Different brands target different consumers. For instance, Kimberly-Clark makes Huggies diapers, but also produces a Walmart budget version. [48] Allegedly, some store-brand items are identical to their name-brand counterparts: they are said to be literally the same product, except for the packaging and price. [43] In other cases, a manufacturer can have multiple formulas for one product, creating a private-label version using one method and the national-label version using another. [49] In 2007, a mass-recall of contaminated pet food products brought to light that more than 100 different brands of pet food, both premium- and private-label, were in fact produced by a single company: Menu Foods Inc. in Ontario, Canada. The ingredients and recipes they used differed substantially among brands, depending on what their clients specified. [48]
In the United Kingdom, supermarkets have been criticised for "fake farm" private label brands. [50] [51]
Fast food restaurant chains sell their products under their private-label brands. Their core items are usually fries and meat-based items, but they might also offer brownies, muffins, cookies, and salads. These private-brand products are offered alongside national-brand products, such as soft drinks by Coca-Cola or Pepsi, and ice creams co-branded with Oreo or M&M's. [52]
A private-label credit card (PLCC) is a type of credit card that can only be used at a specific company or chain of companies. Since this is virtually always a retail business, they are also called store cards. [53] [54] The retailer partners with a bank that issues the cards, funds the credits, and collects payments from customers. The cards themselves are branded with the logo of the store, but not the bank. [55] Examples are the Target Circle Card (formerly Target RedCard) (issued by TD Bank, N.A.), [56] the Walmart Reward Card (issued by Capital One), [57] and the Amazon Store Card (issued by Synchrony Bank). [58] PLCCs also do not carry the logo of the payment network (e.g. Visa or Mastercard), but they do use that network for transactions. [53]
Private-label store credit cards are sometimes compared to but not the same as co-branded credit cards. These cards usually feature the logo of the payment network, and sometimes the logo of the bank. [59] Unlike PLCCs, co-branded cards work like 'normal' credit cards, usable at any place where that type of card is accepted. [60] For instance, warehouse chain Nordstrom offers a Nordstrom Store Card (private label) and a Nordstrom Credit Card (co-branded), both issued by TD Bank, N.A. and using Visa's network. [53]
A supermarket is a self-service shop offering a wide variety of food, beverages and household products, organized into sections. Strictly speaking, a supermarket is larger and has a wider selection than earlier grocery stores, but is smaller and more limited in the range of merchandise than a hypermarket or big-box market. In everyday American English usage, however, "grocery store" is often casually used as a synonym for "supermarket". The supermarket retail format first appeared around 1930 in the United States as the culmination of almost two decades of retail innovations, and began to spread to other countries after extensive worldwide publicity in 1956.
Loblaw Companies Limited is a Canadian retailer encompassing corporate and franchise supermarkets operating under 22 regional and market-segment banners, as well as pharmacies, banking and apparel. Loblaw operates a private label program that includes grocery and household items, clothing, baby products, pharmaceuticals, cellular phones, general merchandise and financial services. Loblaw is the largest Canadian food retailer, and its brands include President's Choice, No Name and Joe Fresh. It is controlled by George Weston Limited, a holding company controlled by the Weston family; Galen G. Weston is the chair of the Loblaw board of directors, as well as chair of the board of directors and CEO of Canada-based holding company George Weston.
The Kroger Company, or simply Kroger, is an American retail company that operates supermarkets and multi-department stores throughout the United States.
Costco Wholesale Corporation is an American multinational corporation which operates a chain of membership-only big-box warehouse club retail stores. As of 2021, Costco is the third-largest retailer in the world and is the world's largest retailer of choice and prime beef, organic foods, rotisserie chicken, and wine as of 2016. Costco is ranked #11 on the Fortune 500 rankings of the largest United States corporations by total revenue. Costco uses a club warehouse wholesale retailer channel of distribution while also selling their private label brand directly to consumers.
Safeway, Inc. is an American supermarket chain. The chain provides grocery items, food and general merchandise and a variety of specialty departments, such as bakery, delicatessen, floral and pharmacy, as well as Starbucks coffee shops and fuel centers. It is a subsidiary of Albertsons after being acquired by private equity investors led by Cerberus Capital Management in January 2015. Safeway's primary base of operations is in the Western United States, with some stores located in the Mid-Atlantic region of the Eastern Seaboard. The subsidiary is headquartered in Pleasanton, California.
Ryohin Keikaku Co., Ltd., or Muji is a Japanese retailer which sells a wide variety of household and consumer goods. Muji's design philosophy is minimalist, and it places an emphasis on recycling, reducing production and packaging waste, and a no-logo or "no-brand" policy. The name Muji is derived from the first part of Mujirushi Ryōhin, translated as No-Brand Quality Goods on Muji's European website.
Generic brands of consumer products are distinguished by the absence of a brand name, instead identified solely by product characteristics and identified by plain, usually black-and-white packaging. Generally they imitate more expensive branded products, competing on price. They are similar to "store brand" or "private label" products sold under a brand particular to the merchant, but typically priced lower and perceived as lower quality. The term off brand is sometimes used. In the United Kingdom, these products are often referred to as "own brand" items.
President's Choice or PC is a line of grocery products and services offered by the Canada-based Loblaw Companies Ltd.
Giant Eagle, Inc. is an American supermarket chain with stores in Pennsylvania, Ohio, West Virginia, Indiana, and Maryland. The company was founded in 1918 in Pittsburgh, Pennsylvania, and incorporated on August 31, 1931. Supermarket News ranked Giant Eagle 21st on the "Top 75 North American Food Retailers" based on sales of $11 billion. In 2021, it was the 36th-largest privately held company, as determined by Forbes. Based on 2005 revenue, Giant Eagle is the 49th-largest retailer in the United States. As of summer 2014, the company had approximately $9.9 billion in annual sales. As of fall 2023, Giant Eagle, Inc. had 496 stores across the portfolio: 211 supermarkets 8 standalone pharmacies, 274 fuel station/convenience stores under the GetGo banner, and three standalone car wash under the WetGo banner. The company is headquartered in an office park in Cranberry Township, PA in Butler County.
Smith's Food and Drug, or simply Smith's, is an American regional supermarket chain that was founded by Lorenzo Smith in 1911 in Brigham City, Utah. Headquartered in Salt Lake City with stores in Utah, Nevada, New Mexico, Arizona, Montana, Idaho, and Wyoming, Smith's became a subsidiary of Kroger in 1998.
Woolworths Supermarkets is an Australian chain of supermarkets and grocery stores owned by Woolworths Group. Founded in 1924, Woolworths is currently Australia's largest supermarket chain with a market share of 32.5% as of 2023.
A white-label product is a product or service produced by one company that other companies rebrand to make it appear as if they had made it. The name derives from the image of a white label on the packaging that can be filled in with the marketer's trade dress. White-label products are sold by retailers with their own trademark but the products themselves are manufactured by a third party.
No Name is a line of generic brand grocery and household products sold by Loblaw Companies Limited, Canada's largest food retailer.
Loyalty marketing is a marketing strategy in which a company focuses on growing and retaining existing customers through incentives. Branding, product marketing, and loyalty marketing all form part of the customer proposition – the subjective assessment by the customer of whether to purchase a brand or not based on the integrated combination of the value they receive from each of these marketing disciplines.
Menu Foods Limited, based in Streetsville in Mississauga, Ontario, Canada, was the largest maker of wet cat and dog food in North America, with its products sold under 95 brand names, which the company identifies as supermarkets, big box and pet product retailers and wholesalers. It was bought out by Simmons Foods in August 2010.
Kroger Wireless LLC is an American mobile virtual network operator providing domestic telecommunications services via the T-Mobile Network. The brand was launched as i-wireless, a Kroger Co. It was trialed in 130 Kroger stores in 2006, before being rolled out by mid-2008 to over 2,200 locations, including banner stores such as Dillons, Ralphs, Fred Meyer, and Fry's Food and Drug. Unique among US wireless operators, i-wireless created a loyalty offer allowing customers the ability to earn Wireless Rewards on select plans when using their shopper's loyalty card on in-store qualifying purchases. In May 2019, the company announced the name of its prepaid product brand changing from "i-wireless, a Kroger Co." to "Kroger Wireless."
Prizes are promotional items—small toys, games, trading cards, collectables, and other small items of nominal value—found in packages of brand-name retail products that are included in the price of the product with the intent to boost sales, similar to toys in kid's meals. Collectable prizes produced in series are used extensively—as a loyalty marketing program—in food, drink, and other retail products to increase sales through repeat purchases from collectors. Prizes have been distributed through bread, candy, cereal, cheese, chips, crackers, laundry detergent, margarine, popcorn, and soft drinks. The types of prizes have included comics, fortunes, jokes, key rings, magic tricks, models, pin-back buttons, plastic mini-spoons, puzzles, riddles, stickers, temporary tattoos, tazos, trade cards, trading cards, and small toys. Prizes are sometimes referred to as "in-pack" premiums, although historically the word "premium" has been used to denote an item that is not packaged with the product and requires a proof of purchase and/or a small additional payment to cover shipping and/or handling charges.
Hannaford is an American supermarket chain based in Scarborough, Maine. Founded in Portland, Maine, in 1883, Hannaford operates stores in New England and New York. The chain is part of the Ahold Delhaize group based in the Netherlands, and is a sister company to formerly competing New England supermarket chain Stop & Shop.
In the United Kingdom, it is common practice for retailers to have their own value brand in an effort to compete on price. These brands have become more popular in the UK with shoppers since the Great Recession caused food prices to rise.
In a white label relationship, while the provider or manufacturer may offer a range of customizations to fit specific needs, they specify the design, parts, ingredients, or offerings.
While national brands had colorful packages with pictures and words describing product quality, private label brands were called "generic," with bland packaging and branding. Consumers then often considered private label products to be of inferior quality compared to the national brands they stood next to.
Another interesting piece of information: generics are often made by that national brand, in the same plant, from the same farm, the same dairy etc, but just packaged in a less flashy way.
Like a store card or a loyalty card, using a co-branded card lets you access discounts and special deals. However, since the card is backed by a major issuer and/or network, you can use it anywhere that type of card is accepted.