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Purpose – This article aims to close some research gaps by differentiating between brand types and price tiers. Many consumers perceive high prices as signals of high quality, yet researchers tend to find only low average correlations between price and objective quality. Previous studies do not account for market shares and paid prices though. Design/methodology/approach – A German consumer panel with more than 30,000 households reveals market shares and paid prices. Combining these data with product test ratings, the authors evaluate price-quality relationships with Spearman’s rank correlation coefficients and distinguish food from non-food products, national brands and private labels and three price tiers. Findings – High price-quality correlations for national brands and non-food private labels indicate that a higher price signals greater product quality. For food private labels, negative correlation coefficients inhibit the use of price as a quality indicator. The price-quality relationship for food private labels implies strong competition among brand owners, based on the price and quality of their products. Originality/value – This article investigates price-quality correlations by accounting for paid prices and product market shares; it also reveals differences across food and non-food products, national brands and private labels and different price tiers against the background of competition strategies. By addressing when consumers use price as a quality indicator, it outlines important managerial implications for manufacturers, retailers and consumers.

This article provides an overview of private-label research by focusing on the food retailing sector. To explain the proliferation of private labels, we identify key drivers by reviewing the determinants discussed in prior literature. This article identifies the conditions that support the proliferation of private labels-retailer concentration and retailer pricing autonomy-and describes the nature of competition between private labels and national brands. It also highlights the drivers of private-label purchases by providing an overview of brand-related determinants, price and risk-related determinants, quality aspects, sociodemographics, and consumer purchasing behavior. The article concludes by proposing three areas for future private-label research.

Consumers use test ratings to inform their buying decisions and enhance their well‐being. This study considers whether and how poor test ratings might induce anti‐consumption behaviors, out of fear of poor product performance. In contrast with previous research, the focus for this study is not intrinsic reasons for anti‐consumption but rather actual purchasing, or non‐purchasing, behavior. With panel data representing 30,000 households, the authors show that the market shares of national brands and private labels considerably decline after the publication of poor test ratings, suggesting high customer churn and anti‐consumption behavior. The use of price promotions for national brands also declines, leading to increasing average paid prices. Among private labels, though, poor test ratings affect the use of price promotions and paid prices only to a small extent. These findings in turn suggest implications for manufacturers, retailers, consumers, and scholars.

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