Third generation of retailer brands - retailer expectations and consumer response

Purpose - The purpose of this paper is to investigate how well grocery stores' motives to implement private labels (create margins and customer perceived brand value, compete with market leading brands, develop store image, enhance store loyalty) are realized, through exploring consumers' attitudes, preferences and behaviour. Design/methodology/approach - The paper is based on the case of Sweden and interviews with the primary grocery purchaser in 300 households who have visited an ICA store (a Swedish supermarket chain) within a time period of the previous 30 days before the interview. Findings - The study shows that there is a correlation between perceived quality and the price customers are willing to pay for private label products. Results also show that there is a strong correlation between perceived value of private label products in specific categories and the stores' overall product variety image. The study further supports the assumption that store loyalty is influenced by the perceived value of the grocery retailer's private label products. Research limitations/implications - The study is limited to Sweden and to only one retail chain. Also, it is an attitude- and survey-based approach rather than based on observation or actual spending data. Practical implications - The results will guide retailers if and how they are fulfilling their ambitions regarding their private label merchandises. The study could provide manufacturers and consumer organizations an insight into how consumers respond to this new phenomenon. Originality/value - It is a report beyond the dominating empirical research contexts of the UK and USA. From a conceptual point of view, the paper adopts a more holistic approach investigating the four major retailer motives simultaneously.