Win–win strategies at discount stores

Abstract

An important development that contributes to store brands' growing success in the grocery market is the increasing number of discount stores that sell predominantly own, private-label (PL) brands. To fight PLs, manufacturers of national brands (NB) feel increasingly compelled to develop better trade relations with discounters. Some discounters, for their part, are looking for opportunities to differentiate themselves, and to move beyond a pure price-based competition, by extending their assortment with attractive NBs. In this study, we determine what factors drive NB success at discount stores, and lead to positive outcomes for both the manufacturer and the discounter.