Impact of private label development across retail formats: Evidences from the Italian dairy market
In the European food sector private labels represent a relevant and increasing share of total sales. Focusing on price strategies, recent theoretical papers conclude that private label development should cause a decrease in the price of national brands, while some empirical studies do not support this prediction. The aim of this study is to explore this empirical relationship for the Italian dairy sector. Using retail sales data, we study how prices of national brands react to private label growth. We find that the impact of private label development on national brand prices is product specific: a negative impact is registered by industrial products such as butter and mascarpone and by highly differentiated products such as yogurt. Positive effect is found in the case of traditional cheeses produced by strong national brands
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