“Debranding”: A Product Strategy With Profit Potential

Abstract

The growing consumer demand for, and acceptance of, so‐called no‐name brands of a variety of food, as well as nonfood, products—from cooking oil to cotton swabs, tomato juice to toilet tissue, brownie mix to beauty aids, and liquor to laundry detergent—is a significant development in retailing. No‐name brands have captured about 2 percent of the total grocery sales in the United States in just three years . According to a recent report prepared by A.C. Nielsen Company, no‐name brand shares in the top fifty product categories in which they are strongest range from 4 to 10 percent of the category sales volumes; this is in spite of the fact that no‐name brands have not yet achieved the broad levels of retail distribution enjoyed by branded products . In fact, the share of no‐name brands is as high as 16 percent in certain product categories based on the sales volumes of only those retail outlets that carry them. Contrary to industry expectations, the growth of no‐name brands appears to be a persistent market phenomenon rather than a passing fad. Indeed, retail chains such as Ralph's on the west coast and Jewel in the midwest now have “generic” aisles in their stores.