• by Sarah Mahoney  @mahoney_sarah, March 17, 2009

Just in time to capitalize on consumers' growing appetite for private-label brands, Wal-Mart Stores is rolling out a massive relaunch of its Great Value line.

The line, first introduced back in 1993 and already the country's largest food brand by both sales and volume, has been expanded to include more than 100 grocery and household consumable categories.

The Bentonville, Ark.-based retailer says it tested more than 5,250 products against leading national brands, and conducted more than 2,700 consumer tests to compare the flavor, aroma, texture, color, and appearance. The results led to it reformulating more than 750 items, including breakfast cereal, cookies, yogurt, and laundry detergent.

As rising food prices and the sour economy squeeze food budgets, other grocery stores are also benefiting from private-label sales. Kroger recently said private-label sales--which now account for 27% of grocery revenue--pushed revenue to a record high, for example.

And increasingly, chains are expanding into higher-end products, proving that "upscale generics" may no longer be an oxymoron. Among the 80 new products that will be available in Walmart stores, for example, are thin-crust pizza, fat-free caramel swirl ice cream, and organic cage-free eggs. And Safeway just announced a new private-label seafood line called Waterfront Bistro, with nearly 30 seafood selections that range from Wild Sea Scallops to Tuscan Roasted Pacific Cod. It already has such higher-end private labels as its highly successful O Organics, as well as Eating Right, Primo Taglio and Signature Café.

Wal-Mart says its research shows that 75% of shoppers say the economy is affecting their decisions about whether to buy to national or grocery store brands--with 30% of shoppers saying they are buying more private-label products than a year ago, and 77% agreeing that store brands they buy "are as good as, if not better than, national brand products."

In addition to the appeal of more choices, consumers are also responding to their value. A new study from the Private Label Manufacturers Association reports that shoppers can save 30% on groceries per week by switching to private-label products--including savings of 50-60% on such products as soda, aspirin, sinus spray and lotion, and 30% on items like grocery and cereals. In total, 35 of the 43 food and non-food items studies saved shoppers more than 20%, and 25% of the products saved shoppers over 40%.