Own label
Own label is product a retailer brands and sells itself, also called private label or a house brand, and usually made for it by a contract manufacturer.
- Is
- Product the retailer brands and sells itself, also called private label or house brand.
- Earns
- Usually more margin per unit, and control of the category's price ladder.
- Watch for
- A launch with no clear tier or shopper, which only cannibalises a brand.
Updated
Meaning / 01
What it means for retail and category teams
Own-label ranges are often tiered: a value tier, a mainstream tier positioned against national brands, and a premium tier. The retailer controls the specification, price and packaging, and usually earns more margin per unit than on a comparable branded line. The trade-off is that own label takes shelf space and promotional slots a national brand would otherwise hold, and the retailer carries the product risk.
Stakes / 02
Why it matters
Own label shapes how shoppers read the price ladder in a category and how much leverage the retailer has with brand suppliers. Launched with a clear shopper and tier in mind, it can lift category margin; launched without one, it can cannibalise a branded line and leave the category no better off.
Example / 03
Illustrative example
The business and figures are illustrative. None of it is customer data.
| Traded up from mainstream own label | 160 |
|---|---|
| Switched from the leading brand | 140 |
| Result | Both routes earn more per bottle |
Every source of the new line's volume earns the retailer more than the sale it replaced.
Read the example as text
A grocer launches a premium own-label olive oil priced between the leading brand and a specialist import, expecting most buyers to trade up from its mainstream own label. After eight weeks it sells 300 bottles a week: 160 from shoppers trading up from mainstream own label and 140 from shoppers leaving the leading brand. The premium line earns $4.20 a bottle, against $2.60 for mainstream own label and $3.10 for the brand, so both routes earn more per bottle and the line stays.
Related / 04
Related concepts
Next step
Bring a range decision to a demo
Use a live decision from your category: a line to add, a promotion to assess or a range to review. We can show how the evidence and decision record fit together.
