What are private labels in merchandising?

Private labels refer to products that are branded by a retailer rather than a manufacturer. These products are typically sold exclusively in the retailer's stores, often at more competitive or lower prices compared to national or manufacturer-branded products. Retailers create private labels to enhance their brand identity, attract cost-conscious consumers, and maintain higher profit margins. By controlling the branding and pricing, retailers can differentiate their offerings and build customer loyalty.

In this context, the core aspect of private labels is their branding by the retailer and their usual pricing strategy, which emphasizes affordability to appeal to a broader customer base. This strategy can lead to increased sales volume as consumers often view private label products as value-driven alternatives to more expensive national brands.