Economics and Rural Development, Volume 8, Number 2

Impacts of The Production of Private Labels on The Food Retailing and Its Suppliers

Jankune Kurthy Gyongyi, Juhasz Aniko, Stauder Marta
Research Institute of Agricultural Economics

Abstract

The share of private label (PL) sales in the retail trade is increasing worldwide. In this paper we analysed the situation is in Hun-gary and how this phenomenon influences the relationship between the suppliers and retailers in the food market. Owing to lack of statistical data we used in-depth interviews conducted with experts of five retail and 24 supplier companies. The most important re-sult of our research was that the Hungarian food suppliers have already developed their PL production strategies. We could distin-guish a defensive, an offensive and an innovative strategy which depended on the characteristics and possibilities of the related firms. It was also an important result that the increase in PL products brought not only disadvantages but also benefits for the suppliers. Al-hough it increased their vulnerability and reduced their profitability, it also improved their capacity utilisation, covered their fixed costs and in some cases opened new markets for the suppliers.

Keyword(s): Private label, food retail, food suppliers


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Economics and Rural Development ISSN 1822-3346 / eISSN 2345-0347

This journal is published under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License. Responsible editors: Prof. Dr Vilija Alekneviciene, Dr Gunita Mazure.