The weak economy has lifted sales of all store or private-label brands, including the inexpensive versions of dog food, paper towels and juice.

Net sales of brands like Winston and Camel increased 15 percent, to $1.5 billion, despite the price increase, although volume declined 9 percent.

Kmart has long counted on sales of exclusive brands to drum up excitement about its stores.

As a result, while overall cigarette sales dropped in 1986, sales of foreign brands were 59 percent above the previous year's level.

In the same period, discount sale increased by 18 percent, while Philip Morris's sales of inexpensive brands grew only 3 percent.

In at least one area, liquid laundry detergent, Wal-Mart's sales of its own brand already appear to be influencing sales of leading national brands.

Overall sales of European brands have dropped by only 6 percent.

The company's problems center on an especially sharp drop in the sales of full-price brands.

Revenue from domestic sales of brands like Marlboro and Merit increased 20.5 percent, to $5.7 billion from $4.7 billion.

Though the strike by California dockworkers had an impact on sales of foreign brands, Mr. Tadross did not believe that alone explained the declines.