Private Brands Conquer the Swedish Market : How Retailers Regard and Handle Private Brands

Abstract: The story of private brands begins in Great Britain in 1928, when Marks & Spencer launched their private brand St Michael. In Sweden, the first private brand was developed during the 1920’s; a coffee named Prinsess Kaffe produced for ICA. Until 1980, private brands were just a cheap alternative to manufacturer owned brands. During the years, it gained more and more market shares. Because of the introduction of private brands, the retailers have gained an increased power over manufacturers and they now also have to handle the competition between manufacturer brands, private brands and customer’s demand. In the Swedish every day commodity trade, private brands represent ap-proximately 15% of the total assortment. A problem that has arose concerning the competition during the latest years, is that the trade constantly increases in the direction of effort on private brands. Private brands are one way for the supermarket chains and the retailers to increase their power over the shelf space, marketing and price setting. Due to the increased competition concerning the shelf space in the stores, the authors found it interesting to investigate how private brands are dealt with. The authors made the research from the retailer’s perspective and their view of private brands and how they compete. The purpose of this thesis is to investigate how private brands are regarded and dealt with, according to the retailer. This study is accomplished with a qualitative method. The authors wanted to gain a deeper understanding for how the private brands influence and compete with manufacturer brands. The authors chose to do a descriptive study since it was in line with the qualitative approach that was used. Fur-ther on, the authors used the basic qualitative research which refers to that data is collected through interviews and observations. Eight retailers were interviewed from ICA, Axfood and Coop. The result of this study gives an explanation of how private brands are dealt with. Private brands receive premium shelf space in the store, but in the end it is up to the customer to decide upon the future of private brands. Dem-onstrations are the most common way to promote the private brands in stores. In the future the retailers claim that private brands will be developed into both niche products as well as low price products.