Giant Eagle has added sushi and imported cheeses in recent years to appeal to discerning shoppers, only to watch bargain hunters run off to such places as Kmart and Sam's Club to pick up cheap paper towels and grape jelly. Now the region's dominant grocer is trying to get those dollars back by launching a new private label brand aimed directly at discount shoppers.

By creating in-house brands that appeal to the wallet or upscale tastes, the O'Hara retailer is doing only what other traditional grocers have tried, to lure back defectors. No longer relegated to the back of the freezer case, private label lines are challenging so-called frequent shopper cards as a way to build loyalty with customers -- not just at grocery stores but at retailers ranging from sporting goods stores to clothiers. That private label goods also generate more profits for the stores is a bonus.

"A can of Pepsi is a can of Pepsi. You can buy it anywhere," said Arun K. Jain, marketing research professor at the University at Buffalo School of Management. "If you like the private label brand, you will come to that store."

Grocers have had store brands for decades but, for a long time, they squandered the opportunity. Lines were often second-class products with little attention to packaging or marketing or store space, often given the worst shelf positions below the customer's eye level. National brands that paid hefty slotting fees and invested in marketing got better treatment.

But carrying the same goods as the grocer next door trained customers to check sales fliers. Shoppers have become cherry pickers, said Jain, grabbing this week's deals on cereal, deli meat and oranges in one store and then going somewhere else for the cheapest paper towels and toilet paper.

Chains such as Sam's Club and Whole Foods Markets have made it all the easier, offering big discounts on bulk items or selling specialty foods that can't be found anywhere else. And major discounters such as Wal-Mart and Target have further cut into business with their own private label household items.

As the competition for shoppers' attention has heated, the grocers' share of the private label market has slipped, to 65 percent last year from 80 percent in 1997, according to market researcher A.C. Nielsen.

Grocers are fighting back by giving their private lines more attention or finding other ways to add exclusivity. Pittsburgh-area Shop 'n Save stores have recently opened departments with goods from established local names such as Strip District seafood purveyor Wholey's Markets and Jeannette's Italian specialty foods operator George E. Delallo Co.

At Giant Eagle, the new Valu Time line that began showing up in stores a few weeks ago includes more than 200 items in no-frills packaging and discount prices below those of the retailer's established store brands. It hopes to attract cost-conscious customers who have "voted with their pocketbooks" by shopping at value and dollar stores, said spokesman Rob Borella.

Giant Eagle, Borella said, was vulnerable at the bottom end of the food dollar. Someone looking for jelly, for example, would have had a choice between a specialty brand such as Polaner, a national brand such as Smuckers and the Giant Eagle brand, generally 10 percent to 15 percent cheaper with a promise of the same or better quality.

But while a 32-ounce jar of Giant Eagle grape jelly now sells for $2.29, the same size Valu Time jelly is available for 96 cents.

Giant Eagle also is adding two new private label lines aimed not at bargain hunters but at connoisseurs and health-conscious shoppers -- a gourmet Mediterranean-style specialty brand and a natural/organic brand.

A new Laurenti brand is meant to appeal to those who may have gone to specialty stores for Italian foods, as well as to persuade midtier pasta buyers to trade up. And Giant Eagle's new Nature's Basket brand is going after the roughly 25 percent of its customers who, it estimates, buy organic and natural foods. U.S. organic food and nonfood sales grew by about a 20 percent last year to $10.8 billion, according to the Organic Trade Association.

National brands have been watching the growth in private labels warily, and Giant Eagle's Borella still expects the manufacturers' goods to take the bulk of the chain's in-store space. "I don't think you'll ever see a situation where you'd see more corporate brands than national brands." But don't be surprised to see a lot more private label brands, too.