Private Label Brands: Benefits and Challenges - Pingo Doce Case Study

This working paper analyzes the growing importance of private labels in today’s modern distribution, and the main opportunities and threats they raise for retailers and national brands. Our main purpose was to: (1) analyze consumer´s perceptions of private label brands, (2) identify their critical relevance for retailers; (3) understand how national brands can benefit from private labels’ sustainable growth and (4) identify the major challenges they bring for different types of national brands (namely, A Brands and B Brands). We used a case study approach and analyzed the strategy of Pingo Doce brand, a private label that belongs to Jerónimo Martins group. Among other relevant findings, we found evidence that the drop in Pingo Doce’s market share, in 2013, was the result of a strategic move to significantly improve consumers’ quality perceptions, and, simultaneously, keep a profitable balance between the private label and national brands.