Value-for-money perceptions of supermarket and private labels

Abstract

Private labels are becoming more sophisticated, spanning many price-quality tiers and categories. As such, private label branding is evolving and retailers have to pay greater attention to factors that affect private label perceptions. One of such factors is the value-for-money perception of the supermarket, which is important both in terms of its competitiveness and the private labels it carries. The aim of this paper is to examine the relationship between value-for-money perceptions of a supermarket and perceptions that the private labels it offers are alsovalue-for-money. We find a positive relationship between value-for-money perceptions of a supermarket and value-for-money perceptions of its private labels, which is stronger for private label non-users. Given that most private labels are not advertised, knowing that non-users of private labels form associations based on the store image is important for private label managers who want to grow the customer base of their private labels. For premium private labels we find that if a premium private label is the only private label in a category, it is perceived just like the traditional private label, suggesting a benefit in offering at least two tiers of private labels. Our findings provide implications for retailers in regards to their private label branding strategies.