eli5, how do “store brands” work?
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After working for Walmart, one of the ways that they are able to produce a decent store brand is by pressuring name-brand manufacturers to do it for them by pushing their retail weight around. They can afford to start their own plant, find out overall costs of production, and then negotiate with name-brand companies to produce the exact same product with the Great Value brand or a similar opening price point (OPP) item.
For example, name-brand Hiland milk and Great Value milk are the same milk produced and packaged in the same plant, just labeled differently. It is cheaper for Walmart to partner with Hiland for production and delivery than start and run their own GV milk plant, but Walmart would do so if it meant saving money. Hiland agrees because it allows them to keep a large market share. BTW Walmart and Kroger both bought milk bottling plants in 2019-20 to shake things up.
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