what can the price gap between branded and generic tell...

What Can the Price Gap Between Branded and Generic Tell Us About Markups?

Robert Barsky, University of Michigan and NBER

Mark Bergen, University of Minnesota

Shantanu Dutta, University of Southern California

Daniel Levy, Emory University

Very Preliminary Draft

For Presentation at the Conference on Income and Wealth,Scanner Data and Price Indexes.

September 15-16, 2000

The authors would like to thank Ning Liu for her outstanding research assistance, SusantoBasu, Kai-Uwe Kuhn, Jim Levinsohn, Steve Salant, Mathew Shapiro for many helpfuldiscussions, and Steve Hoch for access to his survey on national brand/private label qualitydifferences, and both the University of Chicago for access to the data.

Abstract

In this paper we investigate the size of markups for nationally branded products sold in the

U.S. retail grocery industry. Our approach to estimating these markups is to treat the price

of the comparable private label product as an upper bound for the marginal costs faced by

the branded manufacturer. Using scanner data from a large Midwestern grocery chain we

estimate the markup ratios for over 200 products in 19 categories. This data includes not

only the prices and quantities sold by UPC, but also the retailers’ margins on each

product, which allows us to measure the markup ratios for national brands based on

wholesale rather than retail prices. We find that markup ratios measured this way range

from 2.5 for crackers and 2.3 in the analgesics category to 1.2 in canned tuna, with the

majority of categories in the range 1.4 to 1.7. These data also allow us to measure

retailer’s markups over wholesale costs. We find that retailer’s markups are generally

lower for nationally branded products than for private labels. The net effect of this is that

markup ratios measured using only retail price data will understate the markups for

nationally branded products.

I. Introduction

The magnitude of marginal costs and markups over marginal cost are empirical

questions of considerable general interest in economics. Microeconomists are interested in

markups because they bear on such questions as the relevance of alternative models of

imperfect competition, the welfare consequences of market power, and the benefits of new

product introduction. In recent macroeconomic research as well, markups play a central

role. Although macroeconomic discourse most often focuses on the cyclicality rather than

the level of markups, the degree of cyclicality is often limited by the absolute size of the

markup (Rotemberg and Saloner 1986).

The estimation of markups is difficult because of the unobservability of marginal cost.

There are essentially two ways in which inference about markups and marginal cost is

approached in the econometric literature. One approach is via the cost function, which is

either inferred directly from engineering data or estimated from cross-sectional or time

series market data. The other is to estimate consumer demand functions, and compute the

markup based on estimated demand elasticities.

This paper takes a quite different approach to the estimation of marginal costs and

markups. We take the price of a “private label” equivalent or near-equivalent product as a

proxy for marginal cost. Since the private label product would not be sold at less than its

marginal cost, and if the two products are produced under sufficiently similar conditions,

then the ratio of the price of the branded product to that of the private label would serve

as a lower bound for the markup ratio for the branded product1.

Roughly speaking, the story we tell is the following. Private label products are

physically identical to nationally branded products, but because “brands” appears in the

utility function, the branded product commands a higher market price. At the same time,

however, many of the promotional expenses which vertically differentiate the branded

product from its private label counterpart appear largely as sunk or at least fixed costs,

marginal production costs of private label products are therefore not systematically lower

1 This appraoch has been used informally in the past. The text by Carlton and Perlof (1994) and a recentpaper by Nevo (1997) applies this method in passing for breakfast cereals, although its principal contentlies elsewhere.

than marginal costs for branded products. The high ratio of branded price to private label

price is thus indicative of substantial markups. On average, markups estimated in this

manner are on the high side of, though consistent with, those found in previous studies.

For the national brands with the highest visibility or brand capital, markups are particularly

large, on the order of 100%.

We apply this approach to products in the grocery industry. This is an appropriate

place to apply this measure because there are many “private label” products in a wide

variety of categories. Perhaps it is best to begin with a brief historical account of private

labels in this industry. Fitzell (1998), in his book on private labels, recounts that "private

labels in the grocery segment evolved out of bulk commodity staples, first into packaged

teas, sugar, flour, spices, etc. Early in this century, private label development was

expanded further into canned vegetables and fruits, frozen foods, and bakery and dairy

products. Other product categories followed: paper products, detergents, deli items, soft

drinks, health and beauty care products, general merchandise, and perishables such as

meats, poultry and produce … With few exceptions, the packaged goods product mix has

been the central focus of private label business in the retail store … The parameters for

private label have been extended virtually into every product category found in retail

outlets. Private label has tapped into untouchable product categories of the recent past:

cosmetics, baby food, natural health products, gourmet delicacies, etc." It is important to

note that the products sold under the private label of Dominick’s finer foods are not

generics, and are in fact labeled in a way which provides some, but not all, of the functions

of branding. The particular version of branding that Dominick’s offers substantially

reduces uncertainty about the quality of the product, in particular concerns that the store

brand may exhibit physical inferiority.

Further, there are reasons to believe that private labels make a reasonable proxy for

the marginal costs of nationally branded products. First, we were able to access a survey

of quality assurance managers at the top 50 retail grocery chains from retailers where they

rate the quality comparability of private labels and national brands. Although this varies by

category, this survey suggests that on the whole private labels are fairly comparable. This

is consistent with the prevailing wisdom in consumer reports and other sources in the

business and trade press. Second, in discussions with private label managers it was their

belief that the production costs of nationally branded products would be the same or

higher for comparable private label products. This was due to the size and scale

advantages national brands have in terms of packaging, production and input prices. Third,

private labels have the same sources of marginal costs as national brands, and differ in

areas that are related to more fixed costs, in this industry. Specifically private labels do not

spend as significantly on R&D and advertising as national brands do. Their costs are

almost completely made up of production, packaging and distribution costs.

We compute this mark ups using scanner data.2 The grocery industry has scanner data

available to make these estimates for a wide variety of products and categories.

Additionally, the Dominick’s dataset we use in this paper has the unique feature of

incorporating retail margins as used by managers making the pricing decisions at this

chain. Thus, we are able to report markups based on the wholesale prices received by

nationally branded manufacturers as well as the markups retailers receive on both

nationally branded and private label products. This allows us to decompose the markups

that can be calculated from retail prices into the different participants in the channel of

distribution. In section V we report these markups for over 200 nationally branded

products in 19 product categories (see tables 1 - 23).

The paper is structured as follows. In the next section introduces our data and

empirical methods. We proceed to present “markup” data, at both the wholesale and retail

levels, for a wide range of products for which both national brand and private label prices

are available. We discuss the implications of these results in the conclusion.

II. Inferring Marginal Cost and Markups From Private Labels

Our method to measure markups relies on the assumption that we can use the price of

private labels to infer the marginal production cost of national brands. Since the generic

would not be sold at less than its marginal cost, the price gap can thus be seen as a lower

bound on the markup on the brand-name version. The natural question that arises is when

2 This data set has been used to study economic issues by authors including (Chevalier et. al. 2000; Mulleret. al 2000; Bergen et. al. 1998; Dutta et. al 1999).

is it okay to treat the brand and the generic as equivalent products, for the sake of

inferring marginal cost.

At a broad level, we know these are different goods by virtue of their carrying a

different brand name and that customers pay different prices for them. Thus, the principal

issues involve finding out how the branded products are different from the private labels.

To the degree that there are not substantial differences in terms of variable costs, and the

differences relate to fixed costs, we are on safe ground using our measure of markups. To

the degree that the differences are in terms of variable costs borne by branded

manufacturers, then our measure may be overestimating markups and would be less

appropriate. In this industry there are two major sources of differences that could be

variable cost in nature: 1) private label goods are inferior products produced by lower

cost methods (the “physical quality” issue) and 2) even if the private label product is

physically comparable to the nationally branded version, the expense of advertising, and

otherwise promoting the national brand must be taken account of, and these may create

additional marginal costs for national brands (the “marketing cost” objection).

In this section we present the evidence we have found which suggests that, in fact, it

is reasonable to assume that the differences between national brands and private labels are

not likely to be variable costs for many products sold in this industry. We are still in the

process of gathering additional evidence at the level of particular product categories or

national brand/private label pairs to better understand exactly where this assumption is

appropriate in this industry. Finally, we should mention that this is a conservative

assumption for many nationally branded products in this context because private label

manufacturers also have a markup that is not considered in our analysis, which will only

cause our measure to understate markups. With these caveats in mind, we now turn to

each issue in more detail.

A. The Physical Quality Issue

We began our process by going to the field and interviewing a number of industry

experts on private labels. Their sense was that for products of equal quality, the costs of

producing private labels were likely to be the same, or perhaps higher, than for national

brands. One manager put it best when he said,

"national brands should be able to physically produce at a lower cost … they are

able to negotiate lower costs on components and vertically integrate to do processes

themselves rather than having to buy at higher marginal costs." (VP private label food

broker)

Quality

This suggests that the first thing we have to find out is whether private labels in this

industry are indeed of similar quality, and if so which ones are more reasonable to use in

our study. Hoch and Banerji (1993), noting the absence of secondary data source on

private label quality comprehensive enough to cover all the SAMI product categories3,

undertook a survey of quality assurance managers at the fifty largest supermarket chains

and grocery wholesalers in the United States (according to Thomas Food Industry

Register). The companies were widely dispersed across the country. These managers

typically have graduate education in food science and have wide experience testing

numerous product categories. Hoch and Banerji contacted each of these managers by

telephone to solicit their participation, and followed up with a questionnaire. Thirty-two

people (64%) returned the survey, resulting in twenty-five usable sets of responses (50%).

The results reported are the average of these responses. For each of the original SAMI

categories the experts were asked: “How does the quality of the best private label supplier

compare to the leading national brands in the product category?”4 The respondents gave a

rating on a five point scale where using a one suggests that private labels are much worse

in quality than the national brands while using a 5 suggests that these experts think that the

private label quality is comparable to that of the national brand.

Since their primary focus lay elsewhere, Hoch and Banerji did not report the raw data

from the quality survey. However, these authors graciously supplied us with the means of

3 For example, Consumer Reports typically review consumer packaged goods less than once per issue,therefore it does not have quality ratings of all the products that we have in the data set.4 The experts received a one-page set of instructions explaining what we meant by each question and howto use the scales. The question on quality measures the retailer's ability to procure high-quality privatelabels. This was meant to capture "objective" quality rather than quality as perceived by customers.

their survey-based quality rating for each of the categories that we examine in the

Dominick’s data, and we report these in Exhibit 1.

Exhibit 1: Product Category Ratings by Category*

Product Category Ratings on quality of Private LabelAnalgesics 4.8Toothbrushes 4.7Frozen Juices 4.7Cereals 4.7Oatmeals 4.7Crackers 4.6Cheeses 4.6Frozen Entrees 4.6Canned Tuna 4.5Fabric Softeners 4.5Bottled Juices 4.5Laundry Detergents 4.4Snack Crackers 4.4Cookies 4.3Grooming Products 4.3Dish Detergents 4.2Toothpastes 4.2Canned Soup 4.1Bathroom Tissues 4.1Soft Drinks 4.0*We thank Steve Hoch for providing us this data.

At the same time, the survey does have some limitations. Hoch and Banerji (1993)

mention that “it is most likely that the experts were partisan to private labels” since “one

aspect of their jobs involves monitoring and improving private label quality”. In order to

check whether there was any serious bias in the ratings they received, they went through

each issue of consumer reports for the past 6 years and found evaluations of 36 of the

same product categories rated by the quality control experts. For each of these categories

the consumer report provides rank order quality information for leading national brands

and some selected private labels. They find that the ratings from the managers were highly

correlated to those in the consumer report where available. Thus the ratings seem to be a

reasonable indicator of the private label quality relative to the national brands.

Hoch and Banerji’s (1993, p. 62) own evaluation of the evidence is that “the over

riding sentiment of these experts was that quality of the best private label was quite close

to that of the national brands”. This is consistent with industry observers (e.g. Quelch

1996; Fitzell 1998) who suggest that while over the long haul private label products have

not consistently exhibited the uniformly high quality standards as national brands, in recent

years private label products have significantly improved in quality and packaging

enhancements, making them comparable to the national brands. The comparability of

private label quality in these categories is also reinforced by another survey that asks

consumers about their perception of quality premium that national brands offer relative to

private labels (Sethuraman and Cole 1997). This study finds consumers are willing to pay

a price premium for national brands even though they are aware that the price premiums

do not reflect corresponding quality differences.

It is important to stress that the label “Dominick’s Finer Foods” is in itself a kind of

branding which differentiates the supermarket chain’s products from true generics. The

very particular sort of branding Dominicks and other supermarket chain makes no attempt

to provide the utility-yielding associations that is the object of much national advertising.

It may, however, do a very good job of assuring physical quality. Fitzell( 1998, p. 126),

states that “Private label owners did not compromise on quality because they could not

afford to put a store name or their own brand name on a product that would be noted as

inferior”. The private label manufacturers association web site also echoes this sentiment.

It states, “Store brands consist of the same or comparable ingredients as the national

brands and because the store's name or symbol is on the package, the consumer is assured

that the product is manufactured to the store's quality standards and specifications.” Use

of name such as Dominick’s serves a bonding function: if one good (or the services of

one store) proves to be dangerous or unpalatable, there is a spillover on the credibility of

all goods and all stores carrying that label.

Finally, we can use Hoch and Banerji’s private label quality ratings to identify

categories where quality differences are more likely so that we can learn whether the

quality differences are likely to be related to lower variable costs or not. To that end we

did further study of the two product categories that were lowest on Hoch and Banerji’s

survey that were also available from the Dominick’s data, toilet paper and soft drinks.

Toilet Paper

This was one of the lowest rated categories in terms of quality comparability. Thus

the higher markups may, in this category, represent true input quality differences and

therefore differences in marginal costs. We were fortunate enough to have a recent

consumer reports on toilet paper, and a recent economic article by Hausman (1999) on the

category as well. Both of these, as well as a survey of consumer perceptions by

Sethuraman and Cole (1997), reinforced the belief that this category does indeed have

significant quality variation. The consumer reports article reported studies of many

products that ranged broadly from ultra plush Charmin to low quality private labels

products and Scott tissue. Hausman (1999) echoes the claim that some brands are of low

quality while others are of high quality. And Sethuraman and Cole (1997) find that

consumers rate toilet paper as one of the two product categories for which the quality gap

as perceived by consumers is highest. Further, Hausman (1999) suggests that this is due to

real differences in input quality in the pulp used to make the paper, which is likely to lead

to higher costs for higher quality branded manufacturers in this category. We thought this

might allow us to compare the private label Scott, but Scott turns out to have many more

sheets per role than the private label, making it possible that Scott faces higher costs

because of the additional sheets, even if the input costs are the same or lower. In the end

this additional information led us to drop the toilet paper category from our paper (even

though the markups in the category averaged above 2.0). We were not able to find

national brand/private label pairs that were of comparable quality and were sure to be the

same or lower cost for the national brand to produce.

Soft Drinks

According to our quality experts, soft drinks are one of the least comparable in terms of

quality based on quality control manger’s perceptions. To the degree that the quality

differences relate to cost savings for the private label, this would inflate our markup

estimates. Yet to the degree that the differences in quality are in terms of taste or other

inputs into the syrup to make the soft drinks, then it is unlikely to relate to substantial

differences in costs. Unlike toilet paper, we decided to keep soft drinks in this paper

because we felt the sources of quality differences we not likely to be related to the

marginal costs faced by soft drinks manufacturers. In this category the majority of the

costs are bottling and distribution. The cost of the syrup is only a very small proportion of

the cost of producing soft drinks.

Types of Private Label Manufacturers

The second issue our field work suggested was that national brand manufacturers

would be able to produce similar quality products at the same or lower prices than private

label manufacturers. To check this we started at the web page of the Private Labels

Manufacturers Association asserts that private label manufactures fall into four

classifications. They are:

1) Large national brand manufacturers that utilize their expertise and excess plant capacity

to supply store brands.

2) Small, quality manufacturers who specialize in particular product lines and concentrate

on producing store brands almost exclusively. Often these companies are owned by

corporations that also produce national brands.

3) Major retailers and wholesalers that own their own manufacturing facilities and provide

store brand products for themselves.

4) Regional brand manufacturers that produce private label products for specific markets.

Clearly in (1) the branded manufacturer has similar variable costs because it uses the

same production facilities and comparable products. To the degree that private labels

come from sources like (1), branded manufacturers using the same plant, and they produce

essentially identical products with the same inputs, it seems reasonable to assume that the

variable costs are likely to be the same. This is not uncommon in the grocery industry. The

first firm to do this was Borden in the pasta category (Fitzell, 1998). There are many

branded manufacturers doing this with products in our sample as well. The scanner data

set does not identify them, and at the present time we have not been able to identify which

national brand/private label pairs are produced by the same manufacturer. But if we are

able to identify such products we will report them as such in future drafts of the paper.

In (2), those smaller manufacturers who are owned by corporations that also produce

national brands are likely to share the same productions expertise and processes making it

reasonable to assume similar production costs for comparable products. In (3) the costs of

production are likely to be the same or higher for private label producers because they do

not produce the product in the same scale as nationally branded products. Supermarket

chains in the United States are regional, limiting the size and scale they can achieve

relative to “national” brands that sell in all of the major supermarket chains.

That leaves us with (4) the regional brands and some of (2) manufacturers who are

not owned by nationally branded manufacturers. Essentially because of the scale and

negotiation power of branded manufacturers, they are able to produce the products at the

same, or more likely lower prices than store brands. National brands have purchasing

power for raw ingredients, packaging materials, etc.

In general, private label manufacturers are smaller, more regional and more

fragmented than their nationally branded counterparts. For example, Fitzell (1998, p.126)

states that “In the evolution of private label into different product categories, the trend in

the United States was more toward smaller manufacturers/processors, leaving the national

brand business, with its high costs of product development and marketing, to the larger

manufacturers.” As another example consider a TOPCO pamphlet which describes its

buying programs [TOPCO handles distribution for what is perhaps the largest generics

program in the country] states that although some of its “sources are large enough to

produce and market products successfully under their own brands In many cases,

however, they are small and medium sized producers who do not have the financial

strength or organization to market their own brand products effectively in competition

with giant competitors.” (Fitzell 1998).

This value of size for national brands has been noted in academic research studies as

well. For example, Schmalensee (1978) has shown that national brands benefit from the

substantial economies of scale in production and advertising that accrue through national

distribution in the cereal category. Likewise Brown (199?) has shown that larger buyers

can receive substantial quantity discounts on their purchases.

B. The Marketing Cost Issue

The second major source of differences between national brands and private labels is

in terms of marketing costs. Industry sources indicate that in general private label

manufacturers do far less in terms of R&D, advertising, trade promotion and consumer

promotion than national brands. For example, Fitzell (1998, p.126) states that national

brand businesses have “high costs of product development and marketing”

This leaves us with the remaining question of how large these costs are and whether

they are fixed or variable costs in nature. We argue that R&D is a fixed cost, and that

national advertising is predominantly a fixed cost. This leaves trade promotion spending

and consumer promotion spending as possible variable cost differences we must consider.

Notice that the largest effect of both trade promotions and consumer promotions is the

reduced price the manufacturer receives from the promotions. Thus they aren’t marginal

cost differences, but adjustments to the prices the manufacturer receives that we must

consider. There are additional costs of implementing the promotional programs that we

should also consider.

Research & Development

R&D is one area where private labels and national brands differ substantially. Fitzell

(1982) states that “private label manufacturers budgets for research and development,

however, usually fall far short of the national brand manufacturers”. While managers of

national brands see these kinds of expenditures as critical to maintaining their brand

equity. Quelch and Harding state that "Brand equity – the added value that a brand-name

gives to the underlying product – must be carefully nurtured by each successive brand

manager. Managers must continually monitor how consumers perceive the brand.

Consistent, clear positioning – supported by periodic product improvements that keep the

brand contemporary without distorting its fundamental promise – is essential. For

example, Proctor and Gamble Company has made 70 separate improvements to Tide

laundry detergent since its launch in 1956, but the brand's core promise that it will get

clothes cleaner than any other product has never been compromised. Consistent

investment in product improvements enhances a brand's perceived superiority … ".

Clearly R&D spending for new product development is not marginal for products being

sold in grocery chains. According to Monroe (1990), as well as many other authors,

research and development costs "do not vary with the (sales) activity level" and are "not

easily traceable to a product or segment" and thus should be treated as fixed from our

perspectives.

Advertising

Advertising spending is another major difference between national brands and private

labels. National brands invest substantial amounts of money in advertising. For example, in

the Survey of Leading National Advertisers in Advertising Age magazine (2000), they

report that advertising spending for major brands is substantial. Futher, many brands have

been doing this for many years. "The strongest national brands have built their consumer

equities over decades of advertising … " (Quelch and Harding, 1996). In fact, these

authors go on to state that restrictions on television advertising help explain the strength

of private labels in Europe relative to in the United States - “Of course, the reasons for the

strength of private labels in Europe are partly structural. First, regulated television

markets mean that cumulative advertising for name brands has never approached U.S.

levels" (Quelch and Harding, 1996).

This has not been true for most private labels. "Private label owners could not afford

the expense of building their own brand equity through multi-million dollar advertising

campaigns”(Fitzell 1998). In particular, for the retailer we are studying they did not invest

anywhere near these amounts, even on a per unit sold or sales basis, on advertising to

build brands.

The question then is whether it is more reasonable to treat advertising expenditures by

manufacturers as a fixed cost or variable cost. If we suppose for a moment that the

branded variant is heavily advertised while the private label version is not, the average cost

of a unit sold (which includes costs incurred by the "marketing department" in addition to

those of the "production department") would be higher for the branded product. The

question then becomes whether advertising should be seen as a marginal cost (as opposed

to a fixed or sunk cost).

The best evidence we could find on this question in the literature is from the Cox

Annual Survey of Promotional Practices (1996). It surveys consumers, packaged goods

manufacturers and grocery retailers on issues on promotion practice and usage.

Specifically "the packaged goods manufacturer questionnaire was sent to 136 executives,

yielding thirty-two usable replies, for a completion rate of 24%. Fact gathering was

conducted from September 5, 1995 through November 17, 1995. The distribution of the

packaged goods manufacturer responses, based on self-reported major company product

category, is as follows: foods, 59%; household products, 3%; soft drinks and candy, 6%;

health and beauty care, 21%; drug and remedies, 3% and other 8%. Of the respondents,

34% represent larger firms/divisions (annual sales = $1 billion plus) and 66% are smaller

firms/divisions (annual sales = less than $1 billion)."

When asked about national advertising, they state that they view their advertising

expenses as mostly aimed at building brand equity, which is more of a fixed or long run

cost. In 1995 packaged goods manufacturers believe that at least 66% of their advertising

spending was meant to build their brand equity only. Of the remaining 34%, 14% was both

brand equity and consumer promotions, 7% was both brand equity and trade promotions,

and the remaining 13% was brand equity, trade and consumer promotions. So we might be

able to argue that up to 80% of advertising is related to brand equity (since it is part of all

answers). Specifically they asked packaged goods manufacturers the "share of media

advertising programs used to support/build brand equity, consumer and trade

promotions".

There are academic authors in this area who also believe that advertising by national

brands is a fixed, rather than variable, cost. Morton and Zettelmeyer (2000) state that

there is a "difference in fixed costs between national and store brands. The advertising

required to support national brands implies that national brand manufacturers have

average costs that are substantially higher than their marginal costs of production."

Trade Promotions

Manufacturers also invest heavily in trade promotions. In the Cox survey they report

some industry averages on how firms in the grocery industry allocate their promotional

dollars. It looks to be about 50% trade promotions, 25% national advertising and 25%

consumer promotions. So trade promotions are the largest component of manufacturer

spending. Private label manufacturers do not undertake nearly as much trade spending, so

this is another major difference between national brands and private labels.

Fortunately the Dominick’s data already incorporates some of the trade spending in

its wholesale prices, so we have already taken part of manufacturer’s trade promotion

spending into account in our estimates of national brand markups. It is likely that there are

trade promotions that are not captured in the wholesale prices in our data. These are most

likely lumpy payments such as slotting allowances, cooperative advertising allowances,

and various case discounts and spiffs the manufacturer gives to the retailer. To the degree

that they are lumpy, and not incorporated into the wholesale price that retailers are using

in their pricing decisions, however, it is not clear that these expenses are truly variable. So

these unreported trade expenditures may not be as relevant as the trade promotions

incorporated into the data we use in this paper. But to the degree that the unreported

trade spending is variable, and substantial, our measure of markups will be overstated.

Consumer Promotions

This is also a major difference between national brands and private labels. Private

labels tend to not coupon or promote to consumers. While branded manufacturers spend,

on average, 25% of their promotional expenses on consumer promotions. That is about on

par with the amount spent on national advertising.

These activities are likely to be either reductions in the price manufacturers receive

(as with redeemed coupons) or variable expenses to run the promotion. Although scanner

data sets often include measures of coupon use, that is not true in this data set. Thus our

data has not taken these price reductions or expenditures into account at this time. We are

trying to get information on consumer promotions by category or product wherever

possible so that we can factor this into our measures of markup. To give the reader some

sense of how important these may be by category, we report the percentage of sales made

using a coupon for all the product categories in our paper in exhibit 2.

Exhibit 2

Product Category % Dollars with Manufacturers CouponAnalgesics 10.6Toothbrushes 12.5Frozen Juices 1.7 – 5.9Cereals 16.5Oatmeals 9.9Crackers 0.8 – 5.3Cheeses 2.6 – 6.6Frozen Entrees 2.5 – 16.5Canned Tuna 0.6Fabric Softeners 14.2 – 16.3Bottled Juices 0.7-2.1Laundry Detergents 14.0Snack Crackers 6.4Cookies 3.9Grooming Products 9.4Dish Detergents 12.3Toothpastes 13.6Canned Soup 6.5Bathroom Tissues 4.8Soft Drinks 2.2*From Supermarket Business 16th Annual Product Preference Study

In sum, we believe there is enough evidence to suggest that using private label prices

to infer national brand costs is a reasonable assumption in this industry. We are in the

process of gathering additional evidence at a category and product level to check this

assumption further, but there is reason to believe that this measure of markup can be

appropriate for at least some categories and products in this industry. Further, since the

private label will have some markup, and the nationally branded products have advantages

on size and scale in production, packaging and negotiation on input prices we believe the

use of private labels may actually be a conservative measure of these costs.

III. Data

The scanner data come from Dominick's Finer Food (DFF), which is one of the

largest retail supermarket chains in the larger Chicago metropolitan area operating 94

stores.

Large multi store U.S. Supermarket chains of this type made up about

$310,146,666,000 in total annual sales in 1992, which was 86.3% of total retail grocery

sales (Supermarket Business, 1993). In 1999 the retail grocery sales has reached $435

billion (Chevalier, Kashyap, and Rossi, 2000). Thus the chain we study is a representative

of a major class of the retail grocery trade. Moreover, Dominick’s type multistore

supermarket chains’ sales constitute about 14 percent of the total retail sales of about

$2,250 billion in the US. Thus the market we are studying has a quantitative economic

significance as well. ((Since retail sales account for about 9.3 percent of the GDP, our

data set is a representative of as much as 1.28 percent of the GDP, which seems

substantial.))

The data consist of up to 400 weekly observations of actual transaction prices in 29

different categories, covering the period from September 14, 1989 to May 8, 1997. The

data come from the store scanner data base which contain actual retail transaction prices

of the products along with profit margin the supermarket makes on each one of them.

From the information on retail prices and the profit margin, we have constructed the

weekly time series of wholesale prices.

The retail prices are the actual transaction prices: the price customers paid at the

cash register each week. If the item was on sale, then the price data we have reflects the

sale price. Although the retail prices are set on a chain-wide basis at the corporate

headquarters of Dominick’s, there may still be some price variation across the stores

depending on the competitive market structure in and around the location of the stores.

For example, if a particular store of the chain is located in the vicinity of a Cub Food

store, then the store may be designated a “Cub-fighter” and as such, it may pursue a more

aggressive pricing policy in comparison to the stores located in other zones. The data we

use are averaged across the stores of this chain.5

The wholesale price series, which measure the direct cost to the retailer, are computed by

combining the retail price data with the information provided by the retailer on their

weekly gross margins for each product and using the relation, wholesale price = (1 – gross

margin %) multiplied by the retail price. The wholesale price DFF uses for computing their

gross margin series is constructed by the retailer as a weighted average of the amount the

retailer paid for all their inventory. For example, a profit margin of *25.3 means that DFF

makes 25.3 cents on the dollar for each item sold which yields a cost of good sold of 74.7

cents. If the retailer bought its current stock of a Kellog’s Corn Flakes, 18oz, in two

transactions, then its wholesale price is computed as the average of these two transaction

prices (no FIFO or LIFO accounting rules are used in these computations).6

For the purpose of this study, we had to go through the entire DFF’s data set and

identify pairs of national brand and private label products. Of the approximately 350 pairs

we were able to locate in the 29 product categories, we have eliminated a portion of them

because of substantial size differences. For example, if, say, in cereals category we

compare Kellog’s Corn Flakes to DFF’s Corn Flakes, but the national brand comes in 32

oz box (which is a family size) while DFF’s product comes in 18 oz box, then this is not a

good comparison since the two products are not really comparable as they are targeted to

two different kinds of customers, and computing prices per oz would not eliminate this

fundamental problem. Other pairs were eliminated because many non-private label brands

5 Our retail prices reflect any retailer’s coupons or discounts, but do not include manufacturer

coupons. Further, none of these product categories are not used by Dominick’s as loss-leaders.

6 Thus, the wholesale costs in the data do not correspond exactly to the replacement cost or thelast transaction price. Instead we have the average acquisition cost (ACC) of the items in inventory. So thesupermarket chain sets retail prices for the next week and also determines AAC at the end of each week, t,according to the formulaAAC(t+1) = (Inventory bought in t) Price paid(t) + (Inventory, end of t-l-sales(t)) AAC(t)

There are two main sources of discrepancy between replacement cost and AAC. The first is the familiarone of sluggish adjustment. A wholesale price cut today only gradually works itself into AAC as old,higher priced inventory is sold off. The second arises from the occasional practice of manufacturers toinform the buyer in advance of an impending temporary price reduction. This permits the buyer tocompletely deplete inventory and then "overstock" at the lower price. In this case AAC declines

did not really qualify as national brand products as these products are marketed only

regionally (and some even locally only) or they did not have substantial market share. Still

other pairs were eliminated because of our uncertainty about equality of their quality.

Thus, the results we are reporting in the paper are for product pairs, such that (1) the

national brand product is clearly marketed nationally, (2) the national brand products are

widely recognized, (3) the national brand products have non-trivial market share, and (4)

the pair of national brand – private label products are comparable in size and quality, as

much as possible.

The product pairs that pass these criteria represent 19 categories which include

Analgesics, Bottled Juices, Cereals, Cheeses, Cookies, Crackers, Canned Soups, Dish

Detergent, Frozen Entrees, Frozen Juices, Fabric Softeners, Grooming Products, Laundry

Detergent, Oatmeal, Soft Drinks, Snack Crackers, Toothbrush, Tooth Pastes, and Canned

Tuna.7

To compute the average markup figures for each category , which are reported in

Tables 1–3, we had to compress the data by three different procedures of averaging. First,

we have averaged all weekly price series across all the chain's stores to get a single weekly

wholesale and retail price series for each of the national brand and private label products

chosen for the analysis. This averaging was done by weighing the national brand and

private label price series from each store according to the store's sales share in the total

DFF's sale where the sales are measured by the weekly sales figures of the specific national

brand and private label products, respectively. Since the scanner database does not include

information on the quantities purchased at the wholesale level, we used the retail sales

figures as its proxy. This procedure likely introduces a noise in the generated series

because the retail sales are more spread over time in comparison to wholesale purchases

which likely occur with lower frequency. The noise, however, will mostly affect the

weekly volatility properties of the price series, but the average values are unlikely to be

precipitously to the lower price and stays there until the large inventory acquired at that price runs off.Thus, the accounting cost shows the low price for some time after the replacement cost has gone back up.

7 Thus, in the remaining ten categories, which include Bath Soap, Beer, Cigarettes, Front-End-Candies, Frozen Dinners, Paper Towels, Refrigerated Juices, Shampoos, Soaps, and Bathroom Tissues, wewere unable to find comparable national brand-private label pairs.

affected from this procedure in a significant way. The purpose of the weighing procedure

we have implemented is to ensure that the price series coming from the stores that sell

proportionally more than others, receive higher weight.

Next, we computed the weighted average weekly values of the above across-store

weighted averaged series by taking each price series for the sample period it was available

and computing its weekly average value by weighing each weekly observation according

to the share of that week’s quantity sold in the total quantity sold over the entire sample

period. As before, the purpose of this weighing is to give higher weight to observations

(i.e., weeks) that represent higher sales volume measured in terms of products’ quantity

(such as oz’s). In each case the prices of national brand products were weighed using the

sales volume of that specific national brand product while the price series of the private

label products were correspondingly weighed by sales volume of the private label

products. These series then were used to compute various markup measures reported in

Tables A1.1–A19.2.

It should be noted that an alternative way of computing these weekly average markup

values for each national brand-private label product pair is to first compute weekly markup

series for the entire sample period covered by each product pair and then compute their

weekly weighted average using the procedure outlined above. Preliminary calculations

performed using this procedure has so far yielded similar quantitative results in terms of

average markup figures. This procedure, however, has the advantage that by first

computing markups, that is, first computing ratios and then averaging them over time

(instead of first averaging them over time and then computing the ratios) makes it possible

to explore the time series variability in each individual markup series and perhaps also to

provide some measure of over time variability associated with the markup. We are

currently performing these calculations and the next revision of the manuscript will report

the results.

Finally, we have taken the above-calculated average markup figures for each

product pair and computed the average markup for each of the 19 product categories

included in our sample. As before, these category averages were also calculated as

weighted averages. However, unlike the previous steps, here the weighing was done

according to the share of the dollar value of the sales for each product pair in the dollar

value of the total sales in the category. For example, if in the analgesics category we have

22 national brand-private label product pairs, to compute the category average markup,

we took the markup figures for the 22 product pairs (listed in Table A1.1) and computed

their weighted average, where the weights are the ratios of the total dollar sales of the pair

to the total dollar sales in the category. The weights here use dollar sales rather than unit

sales in order to avoid the problem of “adding apples to oranges.” The resulting category

averages figures are reported in Tables 1–3.

IV. Results

The most unique aspect of our findings is that we can back out the wholesale prices

paid by the retailer to manufacturers. This allows us to get a measure of markups for

national brands based on the wholesale prices they receive from retailers. We report the

results from these studies first in section IV.1. Then we report the retail markups on both

national brands and private labels in section IV.2. Finally, in section IV.3 we present the

markups for national brands had we used final retail prices, and discuss the advantages and

disadvantages of using this as an estimate of markups based on lessons from our study.

IV.1 Markup Ratios based on wholesale prices

As seen by Table 1, the markups based on wholesale prices are generally large. These

markup ratios are calculated by dividing the wholesale price of the national brands with

the wholesale price of the comparable private label. For the product categories of

analgesics, toothbrushes, and crackers the markups are higher than 2. This pushes the

markup ratios to the range of substantial market power for national brands in these

categories by Hall's (1986) definition. There are also a couple of product categories that

are near 2, grooming products and fabric softeners. The rest of the product categories fall

in the range of 1.4 to 1.6, which is some market power according to Hall (1986). These

include oatmeal, cereals, bottled juices, cookies, frozen juices, canned soups, snack

crackers, laundry detergents, soft drinks, dish detergents, and toothpaste. The remaining

four categories cheeses, canned tuna, laundry detergent and frozen entrees are in the range

of 1.2 to 1.3.

It is interesting to note that our estimates for ready-to-eat breakfast cereals are very

close to the price-cost margin of 50% found by Hausman (1997) using a sophisticated

demand elasticity approach. Evidence from private label prices is consistent with the

interpretation of branded breakfast cereals, along with a number of other heavily promoted

products, as highly differentiated products with low demand elasticities.

There are examples of large markups by brand within some categories that are

interesting to consider. Tables A1 to A19 give the results by national brand/private label

pair we report in the study. For example, looking at the specific markups by brand and

type of soda we observe some interesting patterns. In the cola category we find that Coke

and Pepsi both have markups near 2, averaging 1.9. While Royal Crown Cola has markups

averaging 1.7, which is closer to the category average of 1.68. Thus, the more heavily

branded and well known products are receiving higher markups in the category. Similarly

for brands in the tonic water types of products, Schweppes, Seagrams and Canada Dry has

markups of 1.82, 1.9 and 2.48 respectively. In analgesics we found the highest markups

for children’s aspirin. In the Toothbrush category we see the highest markups for Reach

and Crest, which are leading national brands. Followed by Pepsodent and Johnson &

Johnson which are the next strongest brands, also receiving markups over 2, but still less

than the Reach and Crest.

Taken as a whole we see a great deal of evidence that there can be substantial

wholesale markup ratios for nationally branded products in this industry. In category after

category, brand after brand, we tend to find markups at least as high as 1.3 and more often

in the 1.4 to 1.6 range. And we find many brands that are able to command markups of

nearly 100% in many categories.

IV.2 Retail markup ratios for private labels and national brands

Table 2 shows the retailer’s markups for the private labels and national brands by

category. We measured retail markup as the retail price of the product divided by the

wholesale price of the product. Two themes seem to emerge from this table. First, in

almost every category the retail markups are higher for private labels than national brands.

Second, retail markups are generally lower for nationally branded products than nationally

branded markups based on our estimates.

An examination of Table 2 shows that the retailer’s markups for national brands range

from 1.03 (cereals and laundry detergent) to 1.38 (toothbrushes). There are many

products with markups less than 1.1, including the categories of analgesics, fabric

softeners, dish detergents, and oatmeal. Most of the other categories fall below markups

of 1.2, including the categories of bottled juice, cheese, cookies, crackers, toothpaste

grooming products, frozen entrees, and canned tuna. The retailer’s markups for private

label products are substantially higher, ranging from 1.07 in laundry detergents to 3.83 in

toothbrushes. Only dish detergents, cereals and frozen entrees are below 1.2, the rest are

higher and tend to be in the range of 1.2 to 1.5.

Comparing the rows in Table 2 we see that the retailer’s markups for private labels

are higher than their markups for national brands in every category except frozen entrees.

In most categories the markup is higher by somewhere between .1 and .2. In some

categories it is even higher, about .3 in analgesics and crackers, and much larger for

toothbrushes. Thus we offer clear evidence that retailer’s markups are higher for private

labels than national brands. This fact is well known in the trade. "The gap between

marginal and average cost of national brands allows retailers to achieve higher price-cost

margins than those earned with national brands. Industry observers, the popular press and

academic work all indicate that this effect can be quite large" (Morton and Zettelmeyer,

2000). Hoch and Banerji (1993) state that "Industry sources suggest that retailer gross

margins on private labels are 20% to 30% higher than on national brands." This is also

consistent with differences between the United States and Europe. "In European

supermarkets, higher private-label sales result in higher average pretax profits. U.S.

supermarkets average only 15% of sales from private labels, they average 2% pre-tax

profits from all sales. By contrast, European grocery stores such as Sainsbury's, with 54%

of its sales coming from private labels, and Tesco, with 41%, average 7% pretax profits."

(Quelch and Harding, 1996)

Comparing Table 2 with Table 1 we see that the retailer’s markups in each category

are lower than the manufacturer’s markups in every instance. For example, even in the

case where nationally branded markups are low, such as canned tuna (1.23) and cheese

(1.31), the corresponding retail markups are 1.14 and 1.17 respectively. The contrasts can

be very large, with nationally branded markups being double or triple the markups of

retailers for the same product.

IV.3 Markup Ratios Based on Retail Prices

Our original inspiration for using scanner data to study markups was based on the

idea of using retail prices to infer markups for national brands. Anyone who walks the

aisles of a supermarket and looks at the prices of national brands and private labels is sure

to see some combinations which suggest that national brands must have substantial

markups. Our most vivid example had one author buying cold remedies at the grocery

store and being stunned by the markups for chemically identical offerings. Further, the

authors who had suggested this approach in the past (Scherer 1980; Carlton and Perloff

1994) had focused on using retail prices to infer markups.

The value of these estimates of markups is that retail prices are becoming more and

more available with new technologies in computers, software, scanning and other systems

being developed. Any markets where prices are posted or price data is systematically

collected offers the possibility of using these kinds of measures to infer markups for

nationally branded products. Further, this kind of price data is already public, so it is easier

to gain access to. To get wholesale prices requires that the retailers give information on

their costs or margins. Usually, wholesale price information is not part of publicly available

scanner data sets. Most firms prefer to keep their margins private and proprietary. One of

the unique advantages of the Dominick’s dataset is that the retailer in willing to share their

margin, and therefore cost, data. Given the proprietary nature of costs and margins, it is

important to assess how well markup estimates based on posted prices work as estimates

of markups.

Table 3 shows the markups for national brands in 19 categories based on the retail

prices of nationally branded products and private labels. The markup estimates range from

a high of 2.36 in toothbrushes to a low of 1.16 for canned tuna. The majority of the

markups are below 1.4, with the only exceptions being cereal (1.45), razors (1.58),

analgesics (1.64), fabric softeners, crackers (1.71) and cookies as well as the

aforementioned toothbrushes. Overall, based on Hall’s ratings (1986), we would suggest

there was some market power but not substantial market power in this data based on

markups estimated from retail price data alone.

In Figure 1 we report the markups in Table 1 and Table 3 together. Two insights

emerge from figure 1. First, the markups based on wholesale prices are significantly larger

than the markups based on retail prices. In general the markups increase by about .2 or

more, depending on the product category. The increase is even larger in analgesics,

crackers, grooming, and toothbrushes.

The reason this occurs is that the retailer takes larger markups on private labels than

on national brands, so that the retail prices understate the manufacturer markups in this

industry by combining the pricing decision of both the retailer and the manufacturers in

this measure. This suggests that one criterion for using retail prices to infer markup is that

retailers have small markups in general to minimize this bias. Or that retailers have more

uniform policies for markups on both national brands and private labels than in this

industry.

Also notice that the general order of which category has the highest markups is

maintained estimating markups using retail prices rather than using wholesale prices. The

highest markup categories such as analgesics are high using both measures. To the extent

that the research question is about variation between markups rather than the absolute size

of markups, this suggests that using retail prices may be appropriate for studying those

questions.

Overall, to the degree that the private label products are comparable, the

differentiation between them and nationally branded products are based on fixed costs

such as advertising or R&D, and the retail markups are small these may be a very useful

proxy for markups in an industry. But the researcher should keep in mind that the retail

markups are lower, so they may understate the markups in this industry.

VI. Discussion and Conclusions

In this paper we have investigated the size of markups for nationally branded products

sold in the U.S. retail grocery industry. Our approach, which we hope will serve as a

complement to more structural econometric approaches, treats the wholesale price of the

comparable private label product as an upper bound on the marginal costs faced by the

branded manufacturer. Using scanner data from a large Midwestern grocery chain, we

have estimated the markup ratios for over 200 products in 19 categories. We found that

markup ratios measured this way range from 2.5 for crackers and 2.3 in the analgesics

category to 1.2 in canned tuna, with the majority of categories in the range 1.4 to 1.7.

Our numbers are on the high side of, though consistent with, those in the existing

literature.

Our approach offers several benefits. Because it involves only a simple computation

(once the data have been assembled), the method permits calculation of markups for a

large variety of products. It is transparent and intuitive, and it offers a benchmark

comparison for more structural approaches.

Particularly in light of the importance of markups in recent macroeconomic discourse,

one might ask whether the finding of high markups for heavily advertised differentiated

products generalizes to the economy at large. In this direction, it is worth noting that even

some “commodity” products such as aluminum and other producers’ goods come in both

branded and generic versions, and that the price gap for those products is comparable to

that for the supermarket goods we have studied. This is also true for other consumer

goods sold outside the supermarket industry, home and office supply products would be

one example.

References

Bergen, Mark, Shantanu Dutta, and Daniel Levy (1998), “Heterogeneity in Price Rigidity:Evidence from Primary Micro-Level Data,” Working Paper, Emory University.

Carlton, Dennis W. and Jeffrey M. Perloff (1994), Modern Industrial Organization(Harper Collins, NY).

Chevalier Judith, Anil K. Kashyap and Peter E. Rossi (2000), “Why Don’t Prices RiseDuring Periods of Peak Demand ? Evidence From Scanner Data” Working PaperUniversity of Chicago.

Cox Eighteenth Annual Promotional Practice (1996)

Dutta, Shantanu, Mark Bergen, and Daniel Levy (1998), “Price Flexibility in Channels ofDistribution: Evidence From Scanner Data,” Working Paper.

Fitzell, Philip (1982) Private Labels: Store Brands and Generic Products, AVI PublishingCompany, Inc., Westport, Connecticut.

Fitzell, Philip (1998) The Explosive Growth of Private Labels in North America, GlobalBooks, LLC, New York.

Hall, Robert E. (1988), “The Relation Between Price and Marginal Cost in U.S. Industry”Journal of Political Economy”, 96, 921-947.

Hausman, Jerry A. (1997) “Valuation of New Goods Under Perfect and ImperfectCompetition”, Timothy Bresnahan and Robert J. Gordon ed., The Economics of NewGoods.

Hausman, Jerry A. and Leonard Gregory K. (1999), “The Competitive Effect of a NewProduct Introduction: A Case Study”, MIT Working Paper

Hoch, Steve, J. S. Kim, Alan Montgomery and Peter Rossi (1995) "Determinants ofStore-Level Price Elasticity", Journal of Marketing Research, 32, February.

Hoch and Banerji (1993) "When Do Private Labels Succeed?", Sloan ManagementReview, Summer.

Hoch (1995) "How Should National Brands Think About Private Labels", Working Paper,University of Chicago.

Monroe, Kent, E. (1990), A Guide to Strategic Pricing,

Morton, Feona Scott and Florian Zettelmeyer (2000), “The Strategic Use of Store BrandIn Retailer-Manufacturer Bargaining”, Working Paper, U.C. Berkeley

Muller,Georg, Mark Bergen, Shantanu Dutta and Daniel Levy (2000), “Price RigidityDuring Holiday Periods: The Role of Menu Costs,” Working Paper

Nevo, Aviv (1997), “Demand For Ready to Eat Cereal and Its Implications For PriceCompetition, Merger Analysis and Valuation of New Brands” Harvard University PhDdissertation.

Quelch, John A. and David Harding (1996) Harvard Business Review, Jan.-Feb., reprint#96109.

Rotemberg, J. J., and Saloner G (1986), “A Supergame-Theoretic Model of BusinessCycle and Price Wars During Booms”, American Economic Review, June, 76, 390-407.

Scherer, F. M. (1980), Industrial Market Structure and Economic Performance, 2ed.Houghton-Mifflin, Boston.

Schmalensee, Richard (1978), “Entry Deterrence In The Ready To Eat Breakfast CerealIndustry”, Bell Journal of Economics, 9, 305-327.

Sethuraman, Raj and Catherine Cole (1997), “Why Do Consumers Pay More For NationalBrands than for Store Brands” Marketing Science Institute, Report # 97-126.

Table 1. Average National Brand Markups Based on Wholesale Prices

Product Category Average Markup

Tooth Brushes 7.93

Crackers 2.53

Analgesics 2.34

Grooming Products 1.92

Fabric Softeners 1.77

Soft Drinks 1.68

Cookies 1.67

Oatmeals 1.55

Canned Soups 1.53

Cereals 1.49

Snack Crackers 1.49

Toothpastes 1.46

Dish Detergents 1.41

Frozen Juices 1.41

Bottled Juices 1.40

Cheeses 1.31

Laundry Detergents 1.26

Canned Tuna 1.23

Forzen Entrees 1.22

Table 2. Average Retailer Markups on National Brand and Private Label

Product Category Average Markup onNational Brand

Average Markup onPrivate Label

Tooth Brushes 1.38 3.83

Crackers 1.14 1.47

Analgesics 1.06 1.36

Grooming Products 1.12 1.37

Fabric Softeners 1.06 1.21

Soft Drinks 1.29 1.48

Cookies 1.13 1.30

Oatmeals 1.09 1.38

Canned Soups 1.29 1.43

Cereals 1.03 1.17

Snack Crackers 1.23 1.40

Toothpastes 1.12 1.28

Dish Detergents 1.07 1.14

Frozen Juices 1.31 1.46

Bottled Juices 1.13 1.23

Cheeses 1.17 1.29

Laundry Detergents 1.03 1.07

Canned Tuna 1.14 1.20

Forzen Entrees 1.18 1.15

Table 3. Average National Brand Markups Based on Retail Prices

Product Category Average Markup

Tooth Brushes 2.36

Crackers 1.98

Analgesics 1.72

Grooming Products 1.57

Fabric Softeners 1.56

Soft Drinks 1.45

Cookies 1.44

Oatmeals 1.24

Canned Soups 1.38

Cereals 1.32

Snack Crackers 1.24

Toothpastes 1.26

Dish Detergents 1.32

Frozen Juices 1.28

Bottled Juices 1.29

Cheeses 1.19

Laundry Detergents 1.20

Canned Tuna 1.16

Forzen Entrees 1.26

Table A1.1. Analgesics: National Brand Markup

Product Pair NB Markup Based on WP

NB MarkupBased on RP

MOTRIN IB CAPLETS 1.61 1.46

MOTRIN IB 1.07 0.95

MOTRIN IB GELCAPS 1.89 1.63

TYLENOL INFANT DROPS 2.08 1.71

TYLENOL X/S CAPLET 2.75 2.19

TYLENOL X/S GELCAPS 1.90 1.73

CHILD CHEW GRAP TYLENOL 1.79 1.37

CHILD CHEW FRT TYLENOL 1.79 1.38

TYLENOL TABLETS REGULAR 2.35 1.86

TYLENOL X/S TABLETS 1.82 1.57



ADVIL 1.86 1.64

ADVIL CAPLETS 1.46 1.32

ANACIN-3 CHILDREN TABS 7.63 3.77

BAYER CHILD ASPIRIN 3.23 1.81

PANADOL CHILD TABS 6.73 3.51

EXCEDRIN IB TABS 50 1.94 1.67

EXCEDRIN IB TAB 100 1.51 1.39

EXCEDRIN IB CAPLETS 1.81 1.64


ALEVE CAPLETS 1.89 1.63

Weighted Average 2.34 1.72

Table A1.2. Analgesics: Retailer’s Markup

Product Pair Retailer’sMarkup on NB

Retailer’sMarkup on PL

MOTRIN IB CAPLETS 1.02 1.12

MOTRIN IB 1.09 1.22

MOTRIN IB GELCAPS 1.04 1.21

TYLENOL INFANT DROPS 1.07 1.31

TYLENOL X/S CAPLET 1.06 1.32

TYLENOL X/S GELCAPS 1.02 1.12

CHILD CHEW GRAP TYLENOL 1.13 1.47

CHILD CHEW FRT TYLENOL 1.13 1.47

TYLENOL TABLETS REGULAR 1.02 1.28




ADVIL 1.03 1.17

ADVIL CAPLETS 1.02 1.12

ANACIN-3 CHILDREN TABS 1.09 2.20

BAYER CHILD ASPIRIN 1.23 2.20

PANADOL CHILD TABS 1.14 2.20


EXCEDRIN IB TAB 100 1.03 1.13

EXCEDRIN IB CAPLETS 1.05 1.16


ALEVE CAPLETS 1.05 1.21


Table A2.1. Bottled Juice: National Brand Markup



MOTTS APPLE JUICE 2.10 2.08

SENECA APPLE JUICE 1.88 1.42

GATORADE ORANGE DRIN 1.83 1.72

NORTHERN CRAN/RASP 1.64 1.50

FLAVOR FRESH APPLE J 1.58 1.14


TREE TOP APPLE JUIC 1.47 1.14

MUSSELMAN APPLE JUIC 1.46 1.13

MM NATL. APPLE JUIC 1.45 1.10

O S RUBY RED GRAPEF 1.43 1.25

O S CRANRASPBERRY DR 1.42 1.33

O S PINK GRAPEFRUIT 1.41 1.31

O S GRAPEFRUIT JUICE 1.37 1.26

NORTHLAND CRANBERRY 1.35 1.38



SPEAS FARM APPLE JUI 1.31 1.08

WELCH'S GRAPE JUICE 1.24 1.22

O S CRANBERRY JUICE 1.23 1.21

SUNSWEET PRUNE JUICE 1.19 1.13

VERYFINE R/RED GRPF 1.17 1.12

VERYFINE CRANBERRY 1.13 1.16

DEL MONTE PRUNE JCE/ 1.00 1.08


Table A2.2. Bottled Juice: Retailer’s Markup



MOTTS APPLE JUICE 1.43 1.44

SENECA APPLE JUICE 1.25 1.66

GATORADE ORANGE DRIN 1.26 1.34


FLAVOR FRESH APPLE J 1.21 1.68


TREE TOP APPLE JUIC 1.19 1.53

MUSSELMAN APPLE JUIC 1.16 1.49

MM NATL. APPLE JUIC 1.12 1.47

O S RUBY RED GRAPEF 1.04 1.20

O S CRANRASPBERRY DR 1.09 1.15

O S PINK GRAPEFRUIT 1.13 1.22

O S GRAPEFRUIT JUICE 1.12 1.22




SPEAS FARM APPLE JUI 1.33 1.62


O S CRANBERRY JUICE 1.04 1.06

SUNSWEET PRUNE JUICE 1.23 1.29

VERYFINE R/RED GRPF 1.15 1.20

VERYFINE CRANBERRY 1.09 1.06

DEL MONTE PRUNE JCE/ 1.36 1.25


Table A3.1. Cereals: National Brand Markup



TOTAL RAISIN BRAN 1.79 1.63

KELLOGGS CORN FLAKES 1.57 1.28

KELLOGGS NUT & HONEY 1.54 1.37

POST RAISIN BRAN 1.51 1.40

KELLOGGS RAISIN BRAN 1.48 1.34

APPLE CINNAMON CHERR 1.48 1.31

W.C. X-RAISIN BRAN C 1.46 1.39

KELLOGG'S FROSTED FL 1.44 1.27

KELLOGG FROSTED FLAK 1.41 1.24

KLLG LWFT GRANOLA W/ 1.40 1.25

HONEY NUT CHEERIOS 1.38 1.22


Table A3.2. Cereals: Retailer’s Markup



KELLOGG’S CORN FLAKES 1.04 1.28

KELLOGG’S LWFT GRANOLA 1.09 1.22

KELLOGG’S NUT & HONEY 1.05 1.18

APPLE CINNAMON CHERRIOS 1.03 1.16

HONEY NUT CHEERIOS 1.02 1.16

KELLOGG’S FROSTED FLAKES 0.99 1.15

KELLOGG’S FROSTED FLAKES 1.03 1.15

W.C. X-RAISIN BRAN 1.09 1.15

POST RAISIN BRAN 1.06 1.14

TOTAL RAISIN BRAN 1.05 1.14

KELLOGG’S RAISIN BRAN 1.03 1.14


Table A4.1. Cheese: National Brand Markup



KR SOFT PHILLY CREAM 1.82 1.53

KRAFT COLBY JACK CHU 1.00 0.93

KR PHILA CREAM CHEES 1.53 1.23

KR GRTD PARMESAN 1.32 1.26

$KRAFT SHRED MOZZARE 1.15 1.12

KR MILD COLBY 1.24 1.09

KR LT/NAT SWISS CHUN 1.33 1.21

KR KLN SLICED SWISS 1.30 1.17

KR LT NAT SHRED MOZZ 1.45 1.30

KRAFT HALFMOON MILD 1.24 1.14

~KRAFT SHREDDED MOZZ 1.17 1.15

KR SL COLBY RESEALAB 1.40 1.24

KR SHRED MOZZARELLA 1.17 1.06

KR SL MUENSTER RESEA 1.40 1.28

KR SHRED MILD CHEDDA 1.29 1.17

KRAFT FINELY SHREDDE 1.24 1.13


Table A4.2. Cheese: Retailer’s Markup



KR SOFT PHILLY CREAM 1.25 1.49

KRAFT COLBY JACK CHU 1.25 1.36

KR PHILA CREAM CHEES 1.20 1.49

KR GRTD PARMESAN 1.09 1.14

KRAFT SHRED MOZZARE 1.05 1.08

KR MILD COLBY 1.19 1.35

KR LT/NAT SWISS CHUN 1.15 1.26

KR KLN SLICED SWISS 1.14 1.27

KR LT NAT SHRED MOZZ 1.19 1.32

KRAFT HALFMOON MILD 1.13 1.23

KRAFT SHREDDED MOZZ 1.13 1.15

KR SL COLBY RESEALAB 1.17 1.31

KR SHRED MOZZARELLA 1.18 1.30

KR SL MUENSTER RESEA 1.18 1.29

KR SHRED MILD CHEDDA 1.19 1.31

KRAFT FINELY SHREDDE 1.18 1.29


Table A5.1. Cookes: National Brand Markup



SALERNO BUTTER COOKI 1.27 1.08

SALERNO CHOC GRAHAMS 1.34 1.18

SALERNO MINT CREAM P 1.53 1.45

SALERNO ROYAL GRAHAM 1.48 1.29

SALERNO OATMEAL PNT 0.96 0.87

SALERNO VANLLA WAFER 1.75 1.44

MINI CHOCOLATE CHIP- 1.37 1.09

SALERNO CHOC CHOC CH 1.83 1.74

SALERNO CHOC CHIP W/ 1.83 1.75

SALERNO PREMIER CHOC 1.82 1.73

SUPER MARIO CHOCOLAT 1.43 1.25

KLBR SUGAR WAFERS-VA 1.74 1.40

ARCHWAY CHOC CHIP S 1.08 1.00

ARCHWAY CINN APPLE S 1.42 1.17

ARCHWAY CHOC CHIP & 1.25 1.10

ARCHWAY CHOCO CHIP& 1.56 1.29

ARCHWAY FF FIG BARS 1.41 1.29

ARCHWAY FATFREE AP 1.53 1.49

KEEBLER LF HONEY GRA 1.98 1.54

W.C.CHOC CHIP ALL B 1.78 1.30

HONEY MAID CHOCOLATE 1.29 1.23

ALMOST HOME CHOCOLAT 1.83 1.51

ALMOST HOME OATMEAL 1.78 1.44

NUTTER BUTTER PNT BT 3.40 2.75

CAMEO CREME SANDWICH 3.37 2.72

FAM AMOS CHOC CHIP W 1.98 1.71

FAM AMOS CHOC CHIP C 1.93 1.68

FAMOUS AMOS CHOC CHI 1.25 1.13

FAMOUS AMOS CHOC CRE 1.37 1.22


Table A5.2. Cookes: Retailer’s Markup



SALERNO BUTTER COOKI 1.18 1.39

SALERNO CHOC GRAHAMS 1.15 1.31

SALERNO MINT CREAM P 1.18 1.24

SALERNO ROYAL GRAHAM 1.14 1.31

~SALERNO OATMEAL PNT 1.25 1.38

SALERNO VANLLA WAFER 1.14 1.39

MINI CHOCOLATE CHIP- 1.08 1.35

SALERNO CHOC CHOC CH 1.13 1.19

SALERNO CHOC CHIP W/ 1.13 1.18

SALERNO PREMIER CHOC 1.13 1.19

SUPER MARIO CHOCOLAT 1.17 1.34

KLBR SUGAR WAFERS-VA 1.12 1.39

`ARCHWAY CHOC CHIP S 1.11 1.19

ARCHWAY CINN APPLE S 1.08 1.32

ARCHWAY CHOC CHIP & 1.19 1.35

~ARCHWAY CHOCO CHIP& 1.11 1.35

ARCHWAY FF FIG BARS 1.06 1.16

~ARCHWAY FATFREE AP 1.09 1.11

KEEBLER LF HONEY GRA 1.11 1.43

~W.C.CHOC CHIP ALL B 1.01 1.37

HONEY MAID CHOCOLATE 1.11 1.16

ALMOST HOME CHOCOLAT 1.12 1.35

ALMOST HOME OATMEAL 1.12 1.39

NUTTER BUTTER PNT BT 1.11 1.38

CAMEO CREME SANDWICH 1.12 1.38

FAM AMOS CHOC CHIP W 1.16 1.35

FAM AMOS CHOC CHIP C 1.17 1.35

FAMOUS AMOS CHOC CHI 1.07 1.18

FAMOUS AMOS CHOC CRE 1.09 1.22


Table A6.1. Crackers: National Brand Markup



NAB PREMIUM SALTINES 4.12 3.02

SALERNO SALTINES 2.93 2.33




HONEY MAID GRAHAMS-L 1.91 1.52

KEEBLER GRAHAM CRACK 1.73 1.41

NAB GRAHAM CRACKERS 1.65 1.34


SALERNO GRAHAM CRACK 1.45 1.22

DELUXE GRAHAM BONUS 1.31 1.03


Table A6.2. Crackers: Retailer’s Markup







HONEY MAID GRAHAMS-L 1.11 1.39

KEEBLER GRAHAM CRACK 1.12 1.37

NAB GRAHAM CRACKERS 1.11 1.37

SALERNO GRAHAM CRACK 1.15 1.37



DELUXE GRAHAM BONUS 1.04 1.32


Table A7.1. Canned Soup: National Brand Markup



C&B CREAM OF MUSHROO 2.57 2.52

PROG CHICKEN RICE W/ 1.30 1.24

PROG MINESTRONE SOUP 1.29 1.29

PROG CHICKEN NOODLE 1.31 1.26

PROG VEGETABLE SOUP 1.35 1.29

PROG ZESTY MINESTRON 2.06 1.86

CAMP TOMATO SOUP 1.57 1.10

CHUNKY MINESTRONE SO 1.32 1.26

CHUNKY VEGETABLE 1.35 1.25

CHUNKY CHICKEN NOODL 1.29 1.23

CHUNKY CHICKEN RICE 1.27 1.22

CHUNKY VEGETABLE SOU 1.44 1.32


HOME COOKIN' TOMATO 1.49 1.42

CAMP CHICKEN WITH RI 1.37 1.19

CAMP CREAM OF CELERY 1.43 1.16

CAMP VEGETABLE BEEF 1.72 1.54

CAMP BEAN W/BACON SO 1.29 1.01

CAMP BROCC CHEESE SO 1.54 1.41

CAMPBELL CHICKEN & S 1.34 1.22

HOME COOKIN MINESTRO 1.27 1.22

SWAN CHIX BROTH 1.45 1.13

HEALTHY REQ. VEGETAB 1.74 1.55

ROKEACH VEGETABLE SO 2.03 1.73


Table A7.2. Canned Soup: Retailer’s Markup



C&B CREAM OF MUSHROO 1.23 1.25

PROG CHICKEN RICE W/ 1.17 1.22

PROG MINESTRONE SOUP 1.30 1.30

PROG CHICKEN NOODLE 1.17 1.22

PROG VEGETABLE SOUP 1.31 1.37

PROG ZESTY MINESTRON 1.19 1.32

CAMP TOMATO SOUP 1.06 1.51

CHUNKY MINESTRONE SO 1.24 1.30

CHUNKY VEGETABLE 1.23 1.33


CHUNKY CHICKEN RICE 1.17 1.22

CHUNKY VEGETABLE SOU 1.46 1.60


HOME COOKIN' TOMATO 1.43 1.50

CAMP CHICKEN WITH RI 1.33 1.53

CAMP CREAM OF CELERY 1.29 1.58

CAMP VEGETABLE BEEF 1.30 1.46

CAMP BEAN W/BACON SO 1.43 1.82

CAMP BROCC CHEESE SO 1.28 1.40

CAMPBELL CHICKEN & S 1.30 1.42

HOME COOKIN MINESTRO 1.25 1.30

SWAN CHIX BROTH 1.52 1.96

HEALTHY REQ. VEGETAB 1.34 1.51

ROKEACH VEGETABLE SO 1.42 1.67


Table A8.1. Dish Detergent: National Brand Markup



DAWN LEMON 1.93 1.81

SUNLIGHT AUTO DISH 1.70 1.61

PALMOLIVE AUTO DISH 1.60 1.50

JOY LEMON 1.54 1.43



LEMON DAWN 1.34 1.22

DIAL AUTO DISH DETER 1.32 1.16

SUNLIGHT AUTO GEL 1.23 1.15

PALMOLIVE AUTO GEL 1.15 1.08

SUNLIGHT LEMON AUTO 1.09 1.00


Table A8.2. Dish Detergent: Retailer’s Markup



DIAL AUTO DISH DETER 1.05 1.20

PALMOLIVE AUTO GEL 1.11 1.18

SUNLIGHT LEMON AUTO 1.08 1.18

JOY LEMON 1.09 1.17

LEMON DAWN 1.05 1.15

DAWN LEMON 1.08 1.15



SUNLIGHT AUTO GEL 1.06 1.13

PALMOLIVE AUTO DISH 1.05 1.12



Table A9.1. Frozen Entrees: National Brand Markup



CELENTANO CHEESE RAV 2.53 2.72

L.C. BAKED CHEESE RA 1.59 1.71

MRS BELGO'S MEAT RAV 1.52 1.77

MRS BELGO'S CHEESE R 1.50 1.70

TOASTED CHEESE RAVIO 1.45 1.42

HLTHY CHOICE MACARON 1.41 1.43

STFR LXP CHEESE RAVI 1.36 1.53

ITALIA MEAT TORTELLI 1.21 1.50

ORE-IDA CHEESE TORTE 1.19 1.31

STFRS MAC & CHEESE 1.17 1.13

ITALIA CHEESE RAVIOL 1.12 1.28

ITALIA MEAT RAVIOLI 1.12 1.29

LC SWEDISH MEATBALLS 1.09 1.06

LC CAFE CLSC GLAZED 1.06 1.05

FLORESTA MEAT TORTEL 0.85 0.93


Table A9.2. Frozen Entrees: Retailer’s Markup



LC SWEDISH MEATBALLS 1.21 1.25

STFRS MAC & CHEESE 1.21 1.25

HLTHY CHOICE MACARON 1.27 1.25

LC CAFE CLSC GLAZED 1.15 1.16

TOASTED CHEESE RAVIO 1.14 1.16

STFR LXP CHEESE RAVI 1.19 1.05

L.C. BAKED CHEESE RA 1.13 1.05

ITALIA CHEESE RAVIOL 1.19 1.04

ORE-IDA CHEESE TORTE 1.15 1.04

ITALIA MEAT RAVIOLI 1.19 1.03

MRS BELGO'S CHEESE R 1.17 1.03

ITALIA MEAT TORTELLI 1.27 1.02

CELENTANO CHEESE RAV 1.09 1.02

MRS BELGO'S MEAT RAV 1.17 1.00

FLORESTA MEAT TORTEL 1.07 0.98


Table A10.1. Frozen Juice: National Brand Markup



MM PINK LEMONADE 3.51 1.88

WELCH'S 100% WHITE G 2.23 1.61

MM FRUIT PUNCH 2.18 1.59


SUNKIST PINK LEMONAD 1.91 3.72

HAWAIIAN PUNCH FRT J 1.87 1.41

MM LEMONADE 1.80 1.26


~SENECA APPLE JUICE 1.57 1.64

~MM ORANGE JUICE 1.52 2.02


MINUTE MAID GRAPEFRU 1.48 1.28

DOLE PINEAPPLE ORANG 1.46 1.32

MM ORANGE JUICE 1.43 1.32

WELCH'S CRAN/RASP JC 1.42 1.35

MM ORANGE JUICE W/CA 1.33 1.36


TREE TOP APPLE JUICE 1.31 1.28


WELCH 100% GRAPE JCE 1.27 1.21

TROP ORANGE JUICE 1.27 1.20

WELCH'S WHITE GRAPE 1.26 1.09

CITRUS HILL ORANGE J 1.25 1.18

TROP SB ORANGE JUICE 1.25 1.17




MM PINK GRAPEFRUIT J 1.11 1.19

SUNKIST ORANGE JUICE 0.98 0.88

~TROP TWISTER CRAN/R 0.78 0.89

WELCH ADE ORANGE 0.75 0.93

~MINUTE MAID CRANBER 0.72 0.81



Table A10.2. Frozen Juice: Retailer’s Markup








MM LEMONADE 1.41 2.02




WELCH'S WHITE GRAPE 1.53 1.76

WELCH'S 100% WHITE G 1.27 1.76



DOLE PINEAPPLE ORANG 1.29 1.44

MINUTE MAID GRAPEFRU 1.24 1.42

MM PINK GRAPEFRUIT J 1.51 1.41

SUNKIST ORANGE JUICE 1.23 1.36

WELCH 100% GRAPE JCE 1.28 1.34

WELCH ADE ORANGE 1.62 1.31

~MINUTE MAID CRANBER 1.45 1.29


TROP SB ORANGE JUICE 1.20 1.28

~TROP TWISTER CRAN/R 1.47 1.28

WELCH'S CRAN/RASP JC 1.21 1.28


MM ORANGE JUICE W/CA 1.30 1.27


TROP ORANGE JUICE 1.20 1.26



~MM ORANGE JUICE 1.50 1.12




Table A11.1. Fabric Softener: National Brand Markup



~BOUNCE SINGLE 2.40 1.54

BOUNCE SINGLE SCENTE 2.01 1.89

~DOWNY REG REFILL 1.92 1.61


~DOWNY SUNRISE REFIL 1.90 1.60


DOWNY ULTRA REFILL 1.68 1.49

~DOWNY ULTRA REFILL 1.68 1.49

BOUNCE 1.63 1.47

DOWNY ULTRA REFILL S 1.60 1.48

DOWNY ULTRA REFILL B 1.60 1.48




Table A11.2. Fabric Softener: Retailer’s Markup



~BOUNCE SINGLE 1.13 1.76





DOWNY ULTRA REFILL 1.09 1.23

~DOWNY ULTRA REFILL 1.09 1.23

BOUNCE 1.04 1.16



BOUNCE SINGLE SCENTE 1.03 1.09




Table A12.1. Grooming Products: National Brand Markup



~SLIM TWIN+ CART 3.58 3.01

SLIM TWIN DISP PPD $ 2.86 1.79

TRAC II PLUS CART 10 2.44 2.06

~SLIM TWIN CARTRIDGE 2.05 1.71

GOOD NEWS PIVOT PLS 1.62 1.42

GOOD NEWS PIVOT PLUS 1.49 1.31

TC DISP RAZOR SINGLE 1.41 1.19

TOP CARE DOUBLE EDGE 1.33 1.02

TC DISP RAZOR TWIN P 1.21 1.12



Table A12.2. Grooming Products: Retailer’s Markup



TC DISP RAZOR SINGLE 1.82 2.16

SLIM TWIN DISP PPD $ 1.17 1.87

TC DISP RAZOR TWIN P 1.37 1.47



~SLIM TWIN+ CART 1.06 1.26

GOOD NEWS PIVOT PLS 1.09 1.25

~SLIM TWIN CARTRIDGE 1.04 1.24

GOOD NEWS PIVOT PLUS 1.09 1.24

TRAC II PLUS CART 10 1.04 1.24


Table A13.1. Laundry Detergents: National Brand Markup



ULTRA IVORY-SNOW 1.84 1.64

ERA H D LIQ DETERG 1.72 1.61

WOOLITE LIQUID 1.63 1.40


~ULTRA TDE W/BLCH 1.49 1.36

SOLO HD LIQ DETG 1.48 1.41

NON PHOS CONC ALL DE 1.42 1.38

TIDE W/BLEACH ULTRA 1.31 1.26

~ULTRA TIDE W/BLEACH 1.27 1.22

NP WISK HD LIQ DET 1.17 1.14

FAB ULTRA LIQUID 1.16 1.17

~ULTRA SURF LIQ 1.15 1.15

SOLO HD LIQUID DETG. 1.07 1.05


ULTRA BOLD 1.05 1.03

ULTRA WISK W/BLEACH 1.05 1.00


Table A13.2. Laundry Detergents: Retailer’s Markup





ULTRA IVORY-SNOW 1.03 1.15

~ULTRA TDE W/BLCH 1.04 1.14

SOLO HD LIQ DETG 1.05 1.10


TIDE W/BLEACH ULTRA 1.02 1.07

ULTRA WISK W/BLEACH 1.02 1.07

FAB ULTRA LIQUID 1.06 1.06

NON PHOS CONC ALL DE 1.03 1.06

~ULTRA TIDE W/BLEACH 1.01 1.05

ULTRA BOLD 1.02 1.05


SOLO HD LIQUID DETG. 1.03 1.04

NP WISK HD LIQ DET 1.01 1.04

~ULTRA SURF LIQ 1.04 1.03


Table A14.1. Oatmeal: National Brand Markup



QUICK QUAKER OATS 1.77 1.31


QUAKER INST OATML RS 1.48 1.27

QUAKER INSTANT OATME 1.47 1.26

QUAKER INST OATML MP 1.40 1.18


Table A14.2. Oatmeal: Retailer’s Markup




QUAKER INST OATML MP 1.09 1.29

QUAKER INSTANT OATME 1.09 1.27

QUAKER INST OATML RS 1.08 1.27



Table A15.1. Snack Cracker: National Brand Markup



SUNSHINE CHEEZ IT 1.61 1.30

KEEBLER CLUB CRACKE 1.43 1.21

TOWN HOUSE CHEDDAR J 1.52 1.23

NABISCO RITZ CRACKER 1.65 1.36


~NABISCO RITZ BITS 1.65 1.32

NABISCO CHEESE NIPS 1.67 1.32

WORTZ SALTINES 0.48 0.66


Table A15.2. Snack Cracker: Retailer’s Markup



SUNSHINE CHEEZ IT 1.15 1.43

KEEBLER CLUB CRACKE 1.12 1.32

TOWN HOUSE CHEDDAR J 1.16 1.43



~NABISCO RITZ BITS 1.13 1.40

NABISCO CHEESE NIPS 1.16 1.48

WORTZ SALTINES 1.92 1.38


Table A16.1. Tooth Brushes: National Brand Markup



PEPSODENT T/B SOFT P 2.47 1.19

PEPSODENT T/B MEDIUM 2.58 1.19

CREST T.B. #6 SOFT S 12.31 3.26

CREST T.B. #2 MED ST 12.87 3.28

CREST T.B. #5 SOFT S 13.98 3.31

CREST T.B. #1 MED ST 13.74 3.31

REACH BETWEEN SOFT 12.25 2.91

REACH BETWEEN MEDIUM 10.92 2.91

J&J FLOSS WAX REG 2.03 1.52

J&J FLOSS UNW REG 2.04 1.52

J&J FLOSS WAX MINT 2.04 1.53


Table A16.2. Tooth Brushes: Retailer’s Markup



PEPSODENT T/B SOFT P 2.00 4.15

PEPSODENT T/B MEDIUM 1.96 4.26

CREST T.B. #6 SOFT S 1.15 4.33

CREST T.B. #2 MED ST 1.14 4.49

CREST T.B. #5 SOFT S 1.15 4.85

CREST T.B. #1 MED ST 1.14 4.75

REACH BETWEEN SOFT 1.21 5.08

REACH BETWEEN MEDIUM 1.21 4.53

J&J FLOSS WAX REG 1.42 1.90

J&J FLOSS UNW REG 1.42 1.91

J&J FLOSS WAX MINT 1.42 1.89


Table A17.1. Canned Tuna: National Brand Markup



C O S LITE TUNA - WA 1.89 1.60



C O S SOLID WHITE - 1.23 1.17

C O S CHUNK LIGHT WA 1.12 1.10




Table A17.2. Canned Tuna: Retailer’s Markup











Table A18.1. Tooth Paste: National Brand Markup



ARM & HAMMER DENTAL 1.57 1.32

PEPSODENT TP W/BAKIN 0.50 0.52

AIM TARTER GEL # 0.69 0.74

PEPSODENT W/FLORIDE 1.53 1.49

CLOSE UP BAKING SODA 1.09 0.95

CLOSE-UP TARTAR CONT 1.22 1.15


~COLGATE TARTER GEL 1.70 1.56

*COLGATE TARTAR REG 1.39 1.22

*COLGATE TARTAR GEL 1.42 1.25


*CREST TRT GEL 1.41 1.25

*CREST REG 2.22 1.60

*CREST TRT REG 1.38 1.23

*AQUA FRESH TOOTHPAS 2.16 1.65

AQUAFRESH TOOTHPASTE 2.05 1.49


Table A18.2. Tooth Paste: Retailer’s Markup




PEPSODENT TP W/BAKIN 1.33 1.29

AIM TARTER GEL # 1.28 1.20

PEPSODENT W/FLORIDE 1.39 1.43

CLOSE UP BAKING SODA 1.12 1.29

CLOSE-UP TARTAR CONT 1.11 1.19



*COLGATE TARTAR REG 1.06 1.20

*COLGATE TARTAR GEL 1.06 1.20


*CREST TRT GEL 1.06 1.20

*CREST REG 1.03 1.42

*CREST TRT REG 1.06 1.20

*AQUA FRESH TOOTHPAS 1.08 1.42

AQUAFRESH TOOTHPASTE 1.03 1.41


Table A19.1. Soft Drinks: National Brand Markup



PEPSI COLA N/R 1.81 1.57

PEPSI DIET N/R 1.91 1.61

PEPSI COLA 2.10 1.57

SCHWEPPS TONIC N/R 1.82 1.29

SCHWEPPS GINGER ALE 1.56 1.24

SCHWEPPES DIET TONIC 1.79 1.28

SCHWEPPES LIME SELTZ 1.95 1.25

SCHWEPPES GINGER ALE 1.83 1.41

CANADA DRY GINGER AL 1.90 1.43

CANADA DRY TONIC WAT 1.98 1.43

R.C. COLA 1.59 1.32

ROYAL CROWN COLA 1.70 1.35

HIRES ROOT BEER N/R 1.98 1.90

SUNKIST ORANGE 2.23 1.59

COCA-COLA CLASSIC 1.83 1.57

DIET COKE 1.91 1.62

MIN MAID FRUIT PUNCH 2.19 1.80

BARQ'S ROOT BEER 2.79 1.87

BARQ'S DIET RT BEER 2.12 1.65

NEW YORK SELTZER COL 1.80 1.50

A W RT BEER REG 1.55 1.31

A W ROOT BEER SF 1.51 1.30

SEAGRAMS GINGERALE 1 2.42 1.38

SEAGRAMS TONIC 1 LIT 2.48 1.46

SEAGRAMS GINGR ALE$ 1.94 1.68

SEAGRAM'S LEMON LIME 1.75 1.51

CANFIELDS LEMON SELT 1.98 1.30

CANFIELD GINGER ALE 2.37 1.79

CANFIELD TONIC 2.62 1.93

CANFIELD COLA NR 1.66 1.66

CANFIELD DIET COLA N 2.09 1.64

CANFIELD SWISS CREME 1.75 1.52

CANFIELD COLA 3LITER 2.02 1.30


Table A19.2. Soft Drinks: Retailer’s Markup

Product Pair Retailer’s Markup on NB

Retailer’s Markup on PL

PEPSI COLA N/R 1.12 1.29

PEPSI DIET N/R 1.10 1.31

PEPSI COLA 1.05 1.40

SCHWEPPS TONIC N/R 1.24 1.74

SCHWEPPS GINGER ALE 1.33 1.67

SCHWEPPES DIET TONIC 1.24 1.74

SCHWEPPES LIME SELTZ 1.12 1.75

SCHWEPPES GINGER ALE 1.05 1.36

CANADA DRY GINGER AL 1.28 1.70

CANADA DRY TONIC WAT 1.28 1.77

R.C. COLA 1.08 1.30

ROYAL CROWN COLA 1.12 1.40

HIRES ROOT BEER N/R 1.24 1.29

SUNKIST ORANGE 0.96 1.34

COCA-COLA CLASSIC 1.11 1.29

DIET COKE 1.11 1.31

MIN MAID FRUIT PUNCH 1.17 1.42

BARQ'S ROOT BEER 0.96 1.43

BARQ'S DIET RT BEER 1.05 1.35

NEW YORK SELTZER COL 1.35 1.63

A W RT BEER REG 1.09 1.30

A W ROOT BEER SF 1.14 1.32

SEAGRAMS GINGERALE 1 1.18 2.07

SEAGRAMS TONIC 1 LIT 1.25 2.12

SEAGRAMS GINGR ALE$ 1.23 1.42

SEAGRAM'S LEMON LIME 1.27 1.47

CANFIELDS LEMON SELT 1.16 1.76

CANFIELD GINGER ALE 1.17 1.55

CANFIELD TONIC 1.17 1.59

CANFIELD COLA NR 1.25 1.25

CANFIELD DIET COLA N 0.97 1.23

CANFIELD SWISS CREME 1.21 1.40

CANFIELD COLA 3LITER 0.98 1.52


Tooth Brushes

Crackers

Analgesics

Grooming Products

Fabric Softeners

Soft Drinks

Cookies

Oatmeals

Canned Soups

Cereals

Snack Crackers

Toothpastes

Dish Detergents

Frozen Juices

Bottled Juices

Cheeses

Laundry Detergents

Canned Tuna

Forzen Entrees

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00

Retail Prices

Wholesale Prices

Chart 1. Average National Brand Markups Based on the Wholesale and Retail Prices

Tooth Brushes

Crackers

Analgesics

Grooming Products

Fabric Softeners

Soft Drinks

Cookies

Oatmeals

Canned Soups

Cereals

Snack Crackers

Toothpastes

Dish Detergents

Frozen Juices

Bottled Juices

Cheeses

Laundry Detergents

Canned Tuna

Forzen Entrees

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00

National Brand Markup

Retailer Markup on Private Label

Retailer Markup on National Brand

Chart 2. National Brand Markup Based on Wholesale Prices and the Retailer Markups

Tooth Brushes

Crackers

Analgesics

Grooming Products

Fabric Softeners

Soft Drinks

Cookies

Oatmeals

Canned Soups

Cereals

Snack Crackers

Toothpastes

Dish Detergents

Frozen Juices

Bottled Juices

Cheeses

Laundry Detergents

Canned Tuna

Forzen Entrees

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00

Retailer Markup on Private Label

Retailer Markup on National Brand

Chart 3. Retailer's Markup on National Brand and Private Label Products

what can the price gap between branded and generic tell...

Documents