The aim of this paper is to in-depth analyze pricing strategies on private label by Modern Grocery Distribution (MGD) chains in Italy. In particular it is based on the elaboration of sell-out data for all FMCG product categories (provided by Symphony IRI Group) in Hypermarkets and Supermarkets for the 2008-2009 full years. These data confirm the growing trend of temporarily reducing prices on private label pro- ducts. Price promotion rates on store brands are higher in product categories with: (i) an high total turnover, (ii) an high price promotion average rate on manufacturer brands, (iii) an high average discount level. Evidence is given on the high positive effectiveness (for retailers) of price promotions on private labels too. Price promotion effectiveness is measured in term of contribution to extra-sales, contribution to market share and contribution to the total turnover of the whole product category.
Keywords: Private label, pricing, price promotion rate, promotion effectiveness, discount level, inter-brand competition