Why do retail outlets not stop stocking a product they've copied?

To increase profit, a supermarket chain may create their own house-brand version of a certain product.

But why is it then that they keep stocking the competitor product?

People tend to buy only one brand, isn't it preferable to get 100% of the profits from your brand AND 15% of the profit from your competitors than just your own?

On top of that let's also consider impulse buying. Customer A comes into your shop to buy [Popular Brand Hammer] while he is in here he spots some of your Screwdrivers and Nails and decides to buy those too. You have profited from your competitors stock in multiple ways.

If you didn't have the competitors stock the customer would have circumvented your shop and you would have lost sales.

Let's also consider it as a convincing point. I.e most shops stock all similar stock together. Customer A comes in to buy [Popular Hammer] but sees yours next to it for £5 less and decides to buy yours instead.

Customer B decides to purchase the Popular Hammer anyway, no amount of convincing would have changed his mind. Rather than lose his sale you instead gain 15% of the competitors money as sales fees. Money you otherwise wouldn't have received.

Let's throw on top of this the idea of rewards cards and points for purchase, even if you don't sell your stock to Customer B, he has earned rewards points, encouraging him to return to your store in the future, where you can hopefully convince him this time to get some of your products.

Conclusion It's profitable to have both types of stock, loyal customers will have always purchased [Popular Brand Hammer], this way you are just making sure you get a cut of the profits too.

You may not be aware that many manufacturers often sell two or more brands that compete directly against each other, on the same shelf space. For instance, Proctor and Gamble sells at least three brands of laundry detergent: Tide, Ariel, Gain. (They probably also manufacture the store's house brand too.)

Why sell competing products as well as your own? Why make products that compete with your own?

• because people want choice: if your store has no choice, fewer people will shop there
• because some people are attached to certain brands: if your store doesn't have the brand they want, they may go elsewhere
• and because you want to make sure you are making money from the sale, no matter which brand people buy: you're laughing all the way to the bank, while they walk out thinking they had a choice