Retailers are marketing the “Captive Brands” (Brands that are sold exclusively by a retail chain) as a way to boost profit margins while competing with known brands.
Retailers have come a long way from the no frills aisle.
Rather than marketing store brands as some lesser, cheaper alternative to brand name products, Wal-Mart, Walgreens, CVS and others are increasingly creating and promoting their own "captive brands."
For example, the bioInfusion line of haircare products, available only at Walgreens, sits on the shelf alongside Procter & Gamble's Pantene. At CVS, Pantene has to contend with the Cristophe line. At Wal-Mart, it is up against Equate.
Carrying no evidence of the store's affiliation, these brands, manufactured by a third party and sold exclusively at the chains (hence "captive"), let the retailer command a price similar to brands produced by consumer packaged goods companies like P&G. They also let the retailers gain ground in a category—beauty—for which consumers generally take a dim view of traditional private label brands
The success of the Captive Brands is seen mostly in beauty products.
One reason why the shift has affected beauty care more than other industries is because the category itself is "over-SKU-ed," said Mike Moriarty, partner at A.T. Kearney's consumer and retail practice division in Chicago. "If you look at the haircare aisle, it has way too much product in it anyway."
With attractive margins and the differentiation, there is every reason for retailers to promote their captive brands.