More home brands are expected to hit the local supermarket shelves over the next five years, a new report said, sustaining the latest trend in the grocery sector that benefits both retailers and consumers.

According to market research firm IBISWorld, consistent surge in private label products will be seen each year through financial year 2017-2018, pushing up consumer spending on the cheaper grocery items from more than $21 billion to $31.8 billion by the end of the projected period.

IBISWorld Australia general manager Karen Dobie pointed to the general state of the domestic economy as the main reason for the significant shift, which has been prompting shoppers to gradually strike out branded items from their 'buy list'.

"Households have been reining in spending, paying off debt and increasing savings. This, coupled with an increase in the range of private-label products available, has led many consumers to shift to home brands," The Australian reported Ms Dobie as saying on the report.

She also pointed out that "the recessive economic climate has been a strong driver of private-label growth.'

Presently, majority of consumers patronising home brands, which major supermarket chains like Coles and Woolworths contract from private label manufacturers, normally belong to those regarded as low-income Aussies.

But that landscape will be redefined soon, IBISWorld said, as major players in the local supermarket competition were set to introduce "premium, organic and fair trade products to attract private-label buyers from all walks of life."

"Consumers in middle and higher income groups represent the strongest growth opportunities for retailers looking to push private-label products," Ms Dobie said.

Efforts by supermarkets to flood the market with home brands would be so overwhelming that soon enough, the more popular branded products will be compelled to pull down suggested retail price in order to cope with the emerging marketing onslaught.

Consumer advocate group Choice welcomed the report as indeed beneficial to the general consuming public, whose demand for more affordable grocery products was amply met by the entry of private labels into the supermarket competition.

But the new IBISWorld report also admitted that with the ramp up demand for home brands, in the end a sector in the whole set up will feel the pinch of the changes.

"All of this discounting means that someone is paying the cost of purchasing $1 litres of milk ... farmer and producer margins are being squeezed," the report said.

"This trend will primarily benefit the supermarket giants and those producers that have been contracted to manufacture private label products," Ms Dobie allowed.