Are they always promising? An empirical analysis of moderators influencing consumer preferences for economy and premium private labels

•Premium private labels are more promising for high-priced grocery stores•Economy private labels are more promising for low-priced grocery stores.•Premium private labels are more promising in categories of high brand relevance.•Economy private labels are more promising in categories of low brand relevance.•No moderating impact of the perceived producer of the private label.

The identification of conditions under which premium or economy private labels are more promising from a consumer perspective is of high managerial relevance. This paper is first to analyze the moderating impact of store-, category-, and private label-characteristics on consumer preferences for premium vs. economy private labels. The results reveal that premium (economy) private labels are more preferred at high-priced (low-priced) retailers and in categories of high (low) brand relevance. However, consumers' believes whether the private label is produced by a well-known manufacturer or the retailer itself do not moderate consumer preferences for premium vs. economy private labels.