What a private label product is, and how its share and profitability are measured in grocery chains
Who it is forCategory and purchasing managers, private label managers, grocery chain finance teams
Private label sits at the centre of the discount grocery business model in Türkiye; on the household side, according to Ipsos, ₺22 of every ₺100 spent on fast-moving consumer goods goes to store brand products. In search, private label, store brand and own brand all stand for the same idea. This guide covers the definition in the legislation and the labelling rule, the share figures in Türkiye, and which measures actually tell you whether private label is more profitable.
What is the legal definition of a store brand product?
Article 3(f) of Türkiye's Law No. 6585 on the Regulation of Retail Trade defines a store brand product as a product that a large store or chain store has produced by others, sells in its premises under its own name or brand, and over whose price, packaging or promotion it has control. Article 6 of the Regulation on the Principles and Rules for Retail Trade repeats the same definition. In everyday use, private label, own brand and store brand all mean the same thing.
Article 8 of the Law sets a rule for the label: on domestically produced store brand products classified as fast-moving consumer goods, the manufacturer's name, title or brand must appear on the product and its packaging alongside the retailer's name, in an appropriate and easily legible form. Article 6 of the Regulation gives the detail: including the manufacturer's name is at the manufacturer's discretion, but the chain the product was made for is stated in every case.
Where the manufacturer's name is shown, the form is prescribed too: in the same typeface as the store brand, at a point size of at least twenty-five per cent of it, and in brackets. That way the consumer can see who made the product.
The element of control in the definition matters commercially: the chain sets the price and the packaging, the manufacturer produces. So the cost of a private label product is not just a purchase price; packaging design, quality control and promotion land on the chain's account too.
| Term | Where it is used | Meaning |
|---|---|---|
| Store brand product | Law No. 6585 art. 3/f and art. 8, Regulation art. 6 | The legal name |
| Own brand product | BİM annual reports | Product the chain sells under its own brand |
| Market brand product | Ipsos Household Consumption Panel | Chain brands in household spending |
| Private label | International literature | The same idea in English |
This section reports the definition in the legislation; it is not legal advice. For labelling and packaging practice, consult the text of the regulation itself and your legal counsel.
Is private label really more profitable?
The usual answer is yes, and on margin percentage it is correct: with the intermediary brand's share removed, private label is set up with a higher percentage margin. But percentage margin does not decide anything on its own, because a business is carried by lira, not by percentages.
The second measure is unit gross profit. Because private label sells cheap, the lira it leaves per unit can be lower than a branded product's. A ₺129 product sold at a 35 per cent margin leaves less lira than a ₺180 product sold at a 30 per cent margin.
The third and decisive measure is GMROI: gross profit over average inventory cost. In private label the order is usually tied to the manufacturer's minimum order quantity, and that lengthens days of inventory. A product with a high margin that sits a long time in stock can earn less than one with a low margin that turns fast.
The right comparison is therefore made inside one category and with all three measures together. Comparing across categories is misleading: putting detergent next to cheese measures the difference between the categories, not the difference private label makes.
- Unit gross profit
Selling price − Unit cost- Gross margin rate
Unit gross profit ÷ Selling price × 100- Average inventory cost
Annual units sold ÷ 365 × Days of inventory × Unit cost- GMROI
Annual gross profit ÷ Average inventory cost
| Measure | Private label | Branded |
|---|---|---|
| Selling price | ₺129.00 | ₺180.00 |
| Unit cost | ₺83.85 | ₺126.00 |
| Unit gross profit | ₺45.15 | ₺54.00 |
| Gross margin rate | 35.0% | 30.0% |
| Annual units sold | 5,200 | 4,000 |
| Annual gross profit | ₺234,780.00 | ₺216,000.00 |
| Days of inventory | 45 | 30 |
| GMROI | 4.37 | 5.21 |
The prices, costs and volumes in the table are ILLUSTRATIVE; rebuild them with your own category's figures. What does not change is the method: the three measures are read together.
The cost items private label hides
The purchase price of a private label product is low, but the purchase price is not the whole cost. The element of control in the definition moves several items the supplier carries on a branded product onto the chain.
Some of these are one-off and some are ongoing. Left unallocated across units, the one-off items make the first year's profitability look better than it is; left in category expense and never brought down to the product, the ongoing ones make private label look unfairly profitable.
The heaviest item is usually the minimum order quantity. Because the manufacturer will not produce below a certain volume, the order grows, days of inventory lengthen and GMROI falls. That is the mechanism behind the table in the previous section.
- Packaging design, plates and tooling — one-off, must be allocated across units
- Quality control, analysis and audit — ongoing, a product expense rather than a category one
- Days of inventory and tied-up capital extended by the minimum order quantity
- Dead stock risk on a product that does not work: a branded item may be returnable or supported, private label stock is yours
The listing fee support, promotional contribution and return facility a supplier provides on branded goods do not exist on private label. When comparing, those supports should be deducted from the branded product's cost, or private label will look more advantageous than it is.
Where private label appears in Mindpera
Mind Space holds private label and branded products in the same table within a category: unit gross profit, days of inventory, GMROI and margin per shelf metre sit side by side. The shelf share decision is taken from that table, not from the revenue share.
Private label's one-off items — packaging design, tooling, analysis — are allocated to the product on the Mind Cost side; because they are not left in category expense, the first year's profitability comes out close to reality.
The effect of the minimum order quantity on days of inventory is visible on the ordering screen: the proposed order quantity, how many days of stock it creates and its effect on GMROI are calculated together. Where sales, stock and purchase data is scattered between the ERP and the category side, it is brought into one model during installation.
- Private label and branded products in the same category table, on three measures
- One-off items allocated to the product, not left in category expense
- The effect of the minimum order quantity on days of inventory and GMROI shown at the moment of ordering
- Shelf share and sales share side by side; categories where the gap widens are flagged
Frequently asked questions
- Are private label and store brand the same thing?
- Yes — store brand product is what the Turkish legislation calls it. Article 3(f) of Law No. 6585 on the Regulation of Retail Trade defines it as a product a large store or chain store has produced by others, sells under its own name or brand, and over whose price, packaging or promotion it has control. In everyday use, private label and own brand are used as well.
- Does the manufacturer's name have to appear on private label packaging?
- The chain the product was made for is stated in every case; including the manufacturer's name, title or brand is at the manufacturer's discretion under Article 6 of the Regulation. Where it is included, the form is prescribed: the same typeface as the store brand, at a point size of at least twenty-five per cent of it, and in brackets. This is general information, not legal advice.
- How large is the store brand share in Türkiye?
- It depends on the measure. Own-brand products were 56 per cent of net sales in BİM's domestic stores in the first quarter of 2026 and 31 per cent at FİLE; at BİM the ratio was reported at 46 per cent in 2005 and 59 per cent in 2024. On the household side, Ipsos reported that 22 per cent of fast-moving consumer goods spending goes to store brand products. The chain ratio and the household ratio measure different things.
- Is private label share calculated on units or on value?
- Both are calculated and they come out differently. Because private label is cheaper than branded goods, the unit share is higher than the value share; in the example category the unit share is 56.5 per cent and the value share 48.2 per cent. The third base, the one actually used in shelf decisions, is share of gross profit. If the base is not written down when a target is set, the target has either already been met or will never be met.
- Is private label more profitable than branded goods?
- On margin rate, usually yes, but the decision is not taken on one measure. In the example category private label runs at 35 per cent against the branded product's 30 per cent; on the other hand private label's unit gross profit is lower and, because the minimum order quantity lengthens days of inventory, its GMROI is 4.37 against 5.21. A comparison that ignores the capital tied up in stock flatters private label.
- What costs does private label carry beyond the purchase price?
- Packaging design, plates and tooling are one-off; quality control, analysis and audit are ongoing. Left unallocated to the product and kept in category expense, they make private label look unfairly profitable. In addition, the listing fee support, promotional contribution and return facility a supplier gives on branded goods do not exist on private label; if the product does not work, the stock stays entirely with the chain.
Sources
- Law No. 6585 on the Regulation of Retail Trade, art. 3/f and art. 8 (Turkish) — 2015-01-29
- Regulation on the Principles and Rules for Retail Trade, art. 6 (Turkish)
- BİM Q1 2026 Activity Report (Turkish) — 2026-03-31
- BİM 2024 Integrated Annual Report (Turkish) — 2024
- Ipsos, fast-moving consumer goods market in the first half of 2025 (Turkish) — 2025-09-10
- Mall Report, Ipsos Q1 2026 fast-moving consumer goods data (Turkish) — 2026-05-05