Private label products or services are those manufactured or provided by one company for offer under another company's brand. Private label goods and services are available in a wide range of industries from food to cosmetics to web hosting. They usually represent lower cost alternatives to regional, national or international brands, although recently some private label brands have begun to compete with premium name brands. Store brands now account for nearly one of every four items sold in U.S. supermarkets, drug chains and mass merchandisers. The products are achieving new levels of growth every year. Indeed, the most accurate figure for all store brand grocery sales is actually well north of the Nielsen figure. There is an estimated $15 billion in sales in not traditionally counted channels such as warehouse clubs, limited assortment/box stores, convenience stores and dollar stores, producing a grand total that almost certainly exceeds $100 billion.

Brands

For American consumers, store brands are brands like any other brands. It is no surprise consumers esteem store brands so highly. They are a boon to consumers' pocketbooks. Shoppers who reached for the store brand of their favorite grocery products rather than the national brand, enjoyed an estimated $21 billion in annual savings, based on industry sales data. The difference is the so-called "marketing tax," which consists of advertising and promotional costs incurred by national brand makers that are passed on to consumers in the form of higher prices at the shelf.

Store brands are important to retailers, too. Throughout the U.S., retailers use store brands to increase business as well as to win the loyalty of their customers. Whether a store brand carries the retailers own name or is part of a wholesaler's private label program, store brands give retailers a way to differentiate themselves from the competition.

Store brands enhance the retailer's image and strengthen its relationship with consumers. Retailers know that consumers can buy a national brand anywhere, but they can only buy their store brand at their stores. Store brand products encompass all merchandise sold under a retail store's private label. That label can be the store's own name or a brand name created exclusively by the retailer for that store. In some cases, a store may belong to a wholesale buying group that owns labels and makes them available to the members of the group as controlled labels.

Major supermarkets, drug chains and mass merchandisers today offer almost any manufactured and distributed product as store brands. These include full lines of fresh, frozen and refrigerated food, canned and dry foods, snacks, ethnic specialties, pet foods, health and beauty care, over-the-counter drugs, cosmetics, household and laundry products, lawn and garden chemicals, paints, hardware, auto aftercare, stationery, and house wares.

Consumers

For the consumer, store brands represent choice and the opportunity to regularly purchase quality food and non-food products at considerable savings without relying on coupons or promotional pricing. Moreover, manufacturers use the same or comparable ingredients in store brands as national brands and because the store's name or logo is on the package, the consumer trusts that the product meets their local quality standards and specifications.

Manufacturers