Betting exclusively for private labels: Could it have negative consequences for retailers?

I. Esteban-Millat,J.C. Gázquez-Abad,J.L. Ruiz-Real,F.J. Martínez-López

doi:10.1016/j.sjme.2016.12.004

I. Esteban-Millat, J.C. Gázquez-Abad + Show 2 more

Open Access

https://doi.org/10.1016/j.sjme.2016.12.004

Copy DOI

Abstract

Abstract Private labels have experienced significant growth in Spain in recent years. The size and composition of product assortments has been impacted by the development of own retail brands, in many cases discarding national brands. Some retailers experienced problems arising from these decisions, being forced to reintroduce some of these brands, suggesting the need to have extensive knowledge about the expected consequences of these decisions on brand management, both in terms of volume of sales and image. In this paper, we analyze the relationship between different consumer attitudinal variables and a number of variables related to consumer perception of the store and purchasing behavior, in assortments composed exclusively of private labels. By means of an experiment based on an online survey, the model's causal relationships are established using structural equations to conclude that the image of stores that only offer their own brand is mainly configured by price consciousness and the attitude toward the private label. The private label purchase intention is strongly influenced by the store image and a favorable attitude toward the brand, and loyalty strategies should be aimed at securing a clear perception of providing real value.

Highlights

Retail distribution sector is clearly important in Spain’s economy
The literature endorses the positive relationship between a favorable attitude toward assortment and store image, with the attitude toward private brands being the subject of much research (Mihic and Culina, 2006; Pandaya and Joshi, 2012), with some papers focusing on the relationship between the perception of store image and attitude (Ajzen, 1988; Ajzen and Fishbein, 2004)
Conclusions and implications for retail management Below, we set out the conclusions obtained and propose a number of recommendations, in terms of management implications, for retailers opting for assortments comprised exclusively of private labels (PLs), be this owing to strategic reasons or budgetary restrictions

Summary

Introduction

Retail distribution sector is clearly important in Spain’s economy. According to the country’s Annual Trade Survey, carried out by its National Statistics Institute in 2013, wholesale and retail contributed 12.3 per cent to the gross added value of the Spanish economy and accounted for 10.9 per cent of the workers in the social security system. According to the same report, the ten leading distribution groups in Spain encompass 52.9 per cent of sales of fast-moving consumer goods. This is why any decisions made by sector companies with regard to their brand portfolio are of particular importance

Methods

Results

Conclusion