Private label portfolios expand in response to inflation: survey

Nearly 60% of retailers are growing their private label portfolios to build loyalty and improve margins in response to inflation, according to a new survey from Relex.

The supply chain platform’s report found that 16% of retailers are also shifting away from national brands, leaving manufacturers to compete on price rather than brands. CPG manufacturers are facing margin pressure, for example, with 70% relying on discounting to compete and 40% introducing “value-tier” products.

As the Trump administration’s new tariffs raise costs on key inputs, the industry is bracing for another wave of inflation. At the same time, competitive pressure could serve as a counterweight to price hikes. About one-third of retailers, for instance, are adjusting their prices to stay competitive, per the survey.

Pressure to invest: This pressure is pushing 60% of firms to explore investments in AI and automation, but 44% can’t find the talent to execute these investments; 43% face budget constraints to scaling their AI initiative; and 39% are contending with poor data quality.

“Today’s supply chain leaders face a dual challenge—they must innovate through technology while adapting to economic pressures,” Madhav Durbha, group VP of manufacturing industry strategy at RELEX Solutions, said in a statement. “The gap between AI’s potential and its practical implementation represents both the greatest risk and opportunity in supply chain transformation today.”

The report found that firms are nonetheless investing between 5%–20% of their technology budgets on AI-driven solutions such as generative AI, predictive AI, and cloud-native solutions.

“Organizations that can bridge the gap between AI’s potential and practical implementation will gain a competitive edge, while those that lag behind may struggle to keep pace,” Durbha said.