Supplier and retailer collaboration over the creation of me-too and own brand private labels

Abstract

This paper investigates how business development takes place through grocery retailers’ collaboration with suppliers. The private labels account for up to over 40 % of grocery retailing in Western countries. Grocery retailers have until recently mainly used private labels as cheaper versions of manufacturer brands, but now seem to use private labels in a proactive strategy competing with other grocery retailers and manufacturer brands on both quality and price. We claim this shift in strategic orientation for private labels demands changes in the pattern of collaboration between retailers and their private label suppliers. Departing from a strategic understanding of grocery retailers’ collaboration with their suppliers this paper investigate and compare collaboration between two types of private label suppliers and grocery retailers. The paper contributes to supplier development theory with a new understanding of collaboration between grocery retailers and various types of private label suppliers. The relevant management implications are described for both retailers and private label suppliers.