Consumers Start to See the Light on Store Brands

Here are two pieces dealing with store brands and how consumers are finally starting to check them out seriously due to the bad economy (after all, saving money appears to be "in" these days.)

The first is from Yahoo and has these interesting comments:

Some 64 percent of shoppers in 2008 said they often or always buy a store brand rather than a national one, according to the Food Marketing Institute, an industry trade group. That's up from 59 percent the prior year.

Kroger Co., owner of Ralphs, Fred Meyer, Food 4 Less and other chains in 31 states, saw sales of its in-house brands hit a record 27 percent of total sales in the most recent quarter.

These numbers seem really, really high to me. Do 64% of shoppers really often or always buy a store brand rather than a national one? Seems like the numbers should be more like 30% to 40% at best. But the Kroger numbers must be good -- and 27% is a HUGE number.

The second article talks about how Walmart is doing all it can to encourage people to buy its store brand. The highlights:

Wal-Mart is stepping up the competition to draw cost-conscious shoppers, promising that store-brand products from cereal to cookies will be tastier, smell better and look more attractive.

The world's largest retailer outlined plans Monday to reformulate hundreds of items in the Great Value store brand that it says is the country's biggest food brand by both sales and volume.

Wal-Mart, responding to the increasing popularity of store-brand products among cash-strapped consumers, is also introducing nearly 100 new products like fat-free caramel swirl ice cream and thin-crust pizza as it tries to better compete with national brands.

The popularity of store brands has soared recently as the economy tanked, with shoppers looking to stretch their dollars, especially as food prices have soared.

The Private Label Manufacturers Association said a basket of 40 average store-brand products runs about 30 percent to 35 percent less than a basket of comparable national brands.

Yep. Why pay 30% to 35% more when a store brand is just as tasty? And since almost all of them offer a like-it-or-bring-it-back guarantee, why not try some of the store brands if you haven't already? If you spend $5,000 on food and shop mostly national brands, switching to store brands could save you $750 a year (assuming half of your purchases are where there are store brand alternatives and you save 30% on that amount.)

I've talked about using store brand before (we probably buy more store brand items than national brands -- and have been doing so for years), so if you want some additional thoughts on this issue, check out these posts:

• Generic and Store Brand Products -- Much Cheaper and Just as Good (Or Even the Same Thing!) as National Brands

• Save Big Money by Using Generic/Store Brands -- Even I Didn't Know the Savings Were This Big!!!

• Health and Beauty Aids: Walmart versus Costco, Kirkland Brand versus Equate Brand -- Which is the Best Deal? 

Comments

[Pat]

I have found that Walmart is significantly less for "name brand" foods or other products than either Kroger or Meijer in the Detroit market. As a friend put it to me "shopping at Walmart is like giving yourself a $1000 raise" True.

[FekketCantenel]

"Why pay 30% to 35% more when a store brand is just as tasty?"

Walmart claims above that they'll be reformulating some foods, and I hope they do. While 90% of their generics taste just as good as the more expensive stuff (after all, how do you screw up boxed spaghetti?), some things just aren't the same. Pop-tarts, hot dogs, cereal, and cola are a few.

I'm still a proud Walmart shopper, though. I just have to buy big brands sometimes.

[Baker @ ManVsDebt]

We are huge generic shoppers, but the above poster does make a point. For example, we love cornbread stuffing, but the Great Value brand tastes far, far worse than any name brand!

[Adam @ Checkbook Diaries]

Converting to store brands is one if the practices that I highlighted in an article I just wrote called "Functional Frugality: What We Will Continue After the Extreme Frugal Fad Dies". I love store brands. They are less expensive than name brands, and are many times identical (made at the same factory but labeled differently). I believe that converting to store brands is something that can be carried on as a money saver even in financially prosperous times.

[My Life ROI]

This was one of the first steps I took to cut my grocery bills down. By getting either store brands or the items on sale my bill is usually 40% lower. And that is without coupons being accounted for.

[Jason H.]

For serious couponers (my wife is in training to become one) getting name brands is cheaper due to the combination of manufacturer and store coupons that come out. Up until 2 months ago, we were store brand buyers. Now -- thanks to sites like www.coupontom.com and others -- we stock up on name brands when we have coupons. I was a believer when my wife brought home a six pack of individual Mott's applesauce for 7 cents (you read that right) from Target and Huggies diapers for $2.50 per pack (normally $10 per pack) from Walgreens -- both places we avoided because they are "too expensive". The important thing to remember in saving serious money is to be a smart and educated consumer.

[DW]

I'm with you Jason ... we still buy a lot of store brand, but since I started paying more attention to coupons and sales, I've been able to buy name brand items cheaper than the store brand.
We eat cold cereral around here .. store brands usually run $1.69 to $1.99 a box (depending on store and type). But I've been able to get name brands with sale/coupon for $1 a box.

[Paula]

You have to look to see which is the better deal. There are some things we buy store brand, but there are a few that don't taste as good as the name brand.

A long time ago when my daughter was in diapers I found that the store brand was exactly the same diaper, they had the same print on them. And the store brand had a program that if you saved the barcode you could get every tenth package free. Loved that program.

We do a lot of coupons too, and just compare the prices to see what is the better deal. I am in southern California and Albertson's has a deal where if you buy a store gift card you can get extra cash. For a $300 dollar card, you get 30 bucks. Limit 4 per person. But that is an extra $120! It says in the small print that it is not good for alcohol or dairy but when we used the card it worked for everything.

[Debra Goettsch]

The statement says "often buys A store brand" In order to be counted in the 64%, a person only has to buy one store brand item sever times a month. Again, an example of how we can make statistics say what we want.