Consumers allocate nearly 18% of their food budget to private-label products, says Information Resources Inc. (IRI) in its Times & Trends: Private Label, The Battle for Value-oriented Shoppers Intensifies. While this is only a 0.2 point change in spending versus 2003, it is important to note the growing role of private label in the strategies of supermarkets' newest competitors.

Wal-Mart and other supercenters long relied upon low pricing on name brand items; however, recent years have seen private label become “an increasingly important part of their value proposition—dollar and volume share growth are now on par with traditional grocery,” the report notes. While some channels have below-average private label shares, club stores have managed to increase private label volume share by three points over the past two years (in food and non-food products), the result of major efforts on the part of that channel. “Dollar stores stand alone as the one value channel that appears to be holding fast to a focused low-cost name brand strategy,” IRI notes.

Grocery private label share has been flat, but IRI predicts the next few years likely will see these retailers increase their private label development and marketing, while also seeking other sources of differentiation, such as niche product offerings and greater focus on fresh foods.

More information may be gleaned from the IRI report, found in the “Thought Leadership” section of