Private labels and negative information : effects across retailers

This paper investigates how negative information about a retailer’s private label (PL) trigger negative spillover effects (a) to other retailers’ PLs and (b) to manufacturer brands (MB) regarding common dimensions of consumer evaluation (attitude, perceived quality, trust, purchase intent). Using scenarios about a fictitious product harm crisis, we conduct a 2x2 plus control group online experiment involving one retailer’s standard PL in the product category of ice cream. Within this product category, we find negative spillover effects from the focal retailer’s defective PL to competing retailers’ PL on attitude and perceived quality. We do not find any significant spillover effects on manufacturer brands. In line with categorization theory, our results support that PLs form one mental category in consumers’ minds.