A grocery store that sells to brand-name loyal customers and to price-sensitive customers must decide whether to carry both name-brand and private-label products and how much to charge. Introducing a private label may either raise or lower the price that a store charges for a brand-name product. As the number of customers that are price sensitive increases, a store may be more likely to carry a private label, but the prices of both the private label and brand-name may rise. As the reservation price of price-sensitive consumers rises, the price differential between the brand name and private label first falls; but if the reservation price rises further, the store may stop carrying the private label. Given price-sensitive consumers, a store may charge a higher price for the brand name than that which would maximize profit if it sold to only brand-loyal customers.