We provide new evidence on retailers’ pricing and advertising of store brands in the U.K. grocery markets. We analyse a simple Hotelling model in which retailers and manufacturers endogenously advertise their respective brands; we account for the impact of advertising on retailer–manufacturer bargaining and downstream competition. The model predicts that retailers advertise their store brands less when advertising is more rivalrous. We present empirical evidence consistent with this prediction. According to our model, aggregate consumer surplus can be higher with store brands than when they are absent from the market.
Authors
![Rachel Cassidy](/sites/default/files/styles/square_desktop/public/2022-08/Rachel_Griffith.jpg?itok=YovGgLq9)
CPP Co-Director, IFS Research Director
Rachel is Research Director and Professor at the University of Manchester. She was made a Dame for services to economic policy and education in 2021.
![Kate Smith](/sites/default/files/styles/square_desktop/public/2022-10/Kate%20Smith_0.jpg?itok=XI8T5gQH)
Research Fellow London School of Economics
Kate is an IFS Research Fellow and an Assistant Professor at LSE, interested in public finance, industrial organisation and applied microeconomics.
![Person graphic](/sites/default/files/styles/square_desktop/public/2022-06/IFS-person-graphic.png?itok=hWCtTSrz)
Michal Krol
Journal article details
- DOI
- 10.1111/joie.12178
- Publisher
- Wiley
- Issue
- March 2019
Suggested citation
R, Griffith and M, Krol and K, Smith. (2019). 'Why do retailers advertise store brands differently across product categories?' (2019)
More from IFS
Understand this issue
![Fruit and vegetable aisle in supermarket](/sites/default/files/styles/square_desktop/public/2023-05/Grocery1.jpg?itok=_BqvtZj7)
What's wrong with inflation?
10 May 2023
![Paul Johnson being interviewed](/sites/default/files/styles/square_desktop/public/2022-09/Paul-Johnson.jpg?itok=yUaO6QN-)
Transparency is key to maintaining trust in government. Let’s not cap it
12 September 2022
![Car Charging](/sites/default/files/styles/square_desktop/public/2022-08/Electric-car-charging-2.jpg?itok=QBeyd31R)
How should the government tax electric cars?
19 May 2022
Policy analysis
![UK bank notes](/sites/default/files/styles/square_desktop/public/2023-08/UK-bank-notes_0.jpg?itok=AJxlVLQE)
Tax and public finances: the fundamentals
23 August 2023
![Grocery shop](/sites/default/files/styles/square_desktop/public/2023-07/Grocery-shop-.jpg?itok=ff8N7DZl)
Poverty
13 July 2023
![Housing Block](/sites/default/files/styles/square_desktop/public/2023-07/Housing-block-2.jpg?itok=v978CrQV)
Living standards, poverty and inequality in the UK: 2023
13 July 2023
Academic research
![Journal Article Cover](/sites/default/files/styles/portrait/public/2024-02/Fiscal%20Studies%20-%202024%20-%20%20-%20Issue%20Information_Page_1.jpg?itok=GfdQz4AB)
Saving by buying ahead: stockpiling in response to lump-sum payments
2 February 2024
![Working Paper Cover](/sites/default/files/styles/portrait/public/2023-12/WP202340-Adverse-selection-among-early-adopters_Page_01.jpg?itok=56a_oVl3)
Adverse selection among early adopters and unraveling innovation
18 December 2023
![Working Paper Cover Page](/sites/default/files/styles/portrait/public/2023-08/WP202322-targeting-taxes-on-local-externalities_Page_01.jpg?itok=W6YECXtL)
Targeting taxes on local externalities
14 August 2023