In recent primary research done for PL Buyer magazine, on health and beauty items, we found that a 20% price discount of store brand over national brand seemed to provide the optimum balance of discount and quality perception. The data showed that as the cost spread grew beyond 30%, more customers believed the quality of the product was inferior. At a 20% discount, about 10% of respondents believed the quality of the private label product was not as good as the national brand. At a 30% discount, that total rose to 25%. At a 40% discount, nearly half thought the private label quality was inferior to the national brand. The full report, Drugstore Buying Habits, is available in our downloads section.
