The Effects of Perceived Private Label Brand Quality and Store Image on Retailer Equity

Store image and private label brand (PLB) have been confirmed to critically influence the success of retail business. Though past studies fervently discuss the effect of store image and private label brand on customer attitudes and behaviors, few studies have examined how store image and perception of PLB quality jointly contribute to retailer equity. This study proposes an integrating theoretical framework for testing the relationships among store image, perceived PLB quality, retailer awareness, retailer perceived quality, and retailer loyalty. The result of a survey among consumers of 6 hypermarkets in China confirms that perceived PLB quality and store image jointly affect retailer loyalty through retailer awareness and retailer perceived quality. Particularly, store image has a direct and significant effect on retailer loyalty, whereas the direct effect of perceived PLB quality is not significant. Additionally, the total effect of store image on retailer loyalty is much stronger than that of perceived PLB quality. Thus, in order to build strong retailer equity, retailers should combine quality management of private label brand with store image strategy to form high-level retailer associations.