Many consumers want brand name products... they're loyal to the brand, not the store. They'll just go elsewhere if you don't what they have today, and you forego any additional items they may buy. Say somebody is out of their deodorant and decides to go to Target for it. But they then also remember they need more Band-Aids, they may as well grab some cereal since they're running low, a bottle of wine when they see it on an end cap, and a couple throw pillows that are cute. That $4 deodorant run netted $75. Now, imagine the customer knew Target didn't carry their brand and they went to Walgreen's instead... $0 instead of $75.

Plus, you're more likely to convert a customer to the store brand by having the name brand next to it for direct comparison. Somebody comes in for a bottle of Tylenol or bag of Domino sugar sees the store brand that's only 2/3 the price for same amount, and they can compare to see it's exactly the same ingredients so they decide to switch. Without the brand name for comparison, the customer might not be willing to pull the trigger.

But you do see some stores that do almost entirely move away from name brands and are successful... look at Aldi or Trader Joe's.