How real is the private-label threat to branded products? What should national-brand manufacturers do about it? On the one hand, manufacturers have reason to be concerned. There are more private labels on the market than ever before; collectively, unit share of store-brand goods place first, second, or third in 177 of 250 supermarket product categories in the United States. But many manufacturers have not fully recognized two important points in considering this threat. First, private-label market share generally goes up when the economy is suffering and down in stronger economic periods. Second, manufacturers of brand-name products can have significant influence on the seriousness of the challenge posed by private-label goods. It is difficult for managers to look at a competitive threat objectively and in a long-term context when day-to-day performance is suffering. But the authors strongly advocate keeping the private-label challenge in perspective.