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Glossary · Category management

Own label

Also called private label, house brand

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

The brand beside it gives up share

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.

Where the premium olive oil's 300 weekly bottles came from
Traded up from mainstream own label160
Switched from the leading brand140
ResultBoth 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

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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.

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