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Abstract
In the European food sector private labels represent a relevant and increasing share of total sales. Thus,
national brands need to adapt their marketing strategies to deal with this growing competition. Focusing on price
strategies, recent theoretical papers conclude that private label development should cause a decrease in the price of
national brands, while some empirical studies do not support this prediction. The aim of this study is to explore this
empirical relationship for the Italian food retail sector, which is of special research interest, since it has undergone a
dramatic change in the last 10 years. Using retail sales data, we build time series of market shares of prices of
national brands and private labels for different dairy products and we study how prices of national brands react to
private label growth. We find that, for most products, the negative impact of private label development on national
brand prices is confirmed, and this may be mainly due to the difficulties in implementing product differentiation
strategies by national brand manufacturers. A relevant exception is the hard discount channel, probably because its
success is attracting an increasing number of national brands.