How can grocey stores sell their own brand?

Question

In the USA it is illegal to Monopolise. So why is it that grocery stores are allowed to sell their own name brand items in their owns stores? For example, Vons would sell Vons branded bottled water, coffee, bread, etc.

Answer 1

I have heard that the name brands are really the same goods as the name brands that are advertised - made in the same factories, of the same ingredients. The store brands, which are not advertised apart from the store advertising (like Safeway, Harris Tweeter, Giant, Higgledy- Piggledy, etc.) are probably those products that the name brand companies (like Heinz, Campbell's, Kraft, etc.) produce to provide supplies under contract to the stores, so that the name brand companies make money both ways - from people who only want to buy the name brands bec. they've seen them advertised (more expensive, the name brands get the profit), and also the name brand companies make money in being able to sell their product at a reduced rate to the stores while being recompensed by their contracts to supply the stores at all times. This way the name brands have 2 guaranteed markets for their goods - name brand customers, and the stores buying the store-brand-labeled goods from the name brands. Not all store brands are equal in quality, though, such as store brand paper towels are not the same quality as name brand paper towel. But as far as food goes, a friend of mine who worked for Safeway told me about the arrangement between the stores and the name brands to supply store brand foods.

As far as the monopoly aspect, I understand that in the U.S. and Canada, since capitalism is the economic supply system, companies are allowed to underbid each other in their race to sell their goods to the consumers. The one thing companies are not allowed to do is collaborate with each other to price fix - such as to arrange with each other to all provide a service or good for the same price, even though that may be much higher than what it costs those companies to provide or produce. This type of price fixing has a name, I just can't think of it.

Also, I've noticed that the U.S. and Canadian governments try to influence the economic market by subsidizing (giving grants to companies to help them pay wages, buy equipment, etc.) companies that are not otherwise able to compete with the larger companies in providing services or goods at lower prices. So we don't have true capitalism in the U.S. or Canada. On the other hand, I understand the reason for these subsidies is to ensure that there is enough employment - not too many people unemployed. The more competitive the market, supposably the higher the quality of the goods and services, and/or the lower the prices available to the consumers, which I think is what capitalism aims for. Under Russian communism, everyone was employed by the government, there were no private companies, but the quality of good such as cars, etc. was poor. Usually there was only 1 or a few types of a product. And the black market flourished there, people trading each other goods and/or services to get better quality merchandise which came from other countries, or that they could not afford to pay for with money.

Answer 2

Most "Own Brand" items are made for retailers by other manufacturers. They make these items cheaper than the national brands, and put the store brand on the label. The retailer charges less for these than for the national brand.

This lower price seems like a value to price conscious customers, and the retailer makes more money than if they would selling the national brands.

A monopoly would be when, like someone mentioned before, one retailer is the only place to go. If Wal-Mart were to buy and close all the other grocery stores in your town, that would be a monopoly.

Answer 3

They offer more than just their brands in the store. And Vons, for example, isn't the only grocery store.

Answer 4

There are many grocery stores out there and each store may sell their own brand but they also sell many other brands as well. So you are free to purchase your choice of brands - you're not being forced to buy one certain brand.

Answer 5

It is not a monopoly because they feature other, higher end brands than their own; therefore, it is not a monopoly, it is free choice by the consumer as to what the consumer wants and is willing to pay, which is free trade.

Monopoly would be if they only offerred THEIR brands for sale.

Answer 6

It is not a monopoly, you are free to choose other brands and other stores, which would not have the other stores brands on their shelves. For example Foodtown does not sell ShopRite bread.

Answer 7

You're free to choose which brand to buy, but places like Walmart really are monopolising when you consider that they will most likely put mom and pop stores out of business.

Answer 8

Because they are not the only grocery store.

monopoly - A company or group having exclusive control over a commercial activity.

It is not illegal to have a monopoly, look at the company providing your electricity and natural gas to your home. Is there a choice?

Answer 9

thats like saying pizza hut cant sell there own pizza it there stores

Answer 10

You are free to go elsewhere, so its not a monopoly.