> They’re often cheaper because the store increases the price of the competitors’ wares to make their own store-product more appealing Maybe irrelevant to the

> They’re often cheaper because the store increases the price of the competitors’ wares to make their own store-product more appealing Maybe irrelevant to the point, but in my experience that is very wrong. They're cheaper because: * they have approximately zero marketing costs other than the cost of the shelf space, which they have better insight to sizing than their competitors * They didn't have to spend as much testing and refining to develop a quality product, because they already have a good sense of what the market is after because they're copying something people want * They don't have to maintain a staff of salespeople working to negotiate their products into stores. They know exactly where their product is destined to go, and how much to produce to satisfy market demands. * Because they have split-tested the price against which users see their value brand as enough of a bargain to switch from Fruit Loops to Fruity-Ohs or whatever. Yes, there is a portion of that component that has to do with the margins applied against the name brands, but stores aren't marking up their competitors' prices beyond the normal markup, and just as an aside, if Fruity-Ohs were selling better at a price than Fruit Loops, the store would increase their pricing. TLDR, if the market agreed, it would be very possible for the generic brands to cost more than the name brands, but due to point 1 (marketing) that is extremely unlikely to happen.