And if you make up a statistic, 83% of working-class Americans will believe you.
No, actually, the folks at our local Food Lion filled up two shopping carts with canned goods, snacks, disposable items, and other representative groceries.
On the right, the cart was filled with all name-brand items. The cash register receipt was taped to the sign on the cart with the total: $142.67.
On the left, the cart was will with the same items, but all store-brand. The receipt was taped to the sign on the cart with the total: $36.66.
Now, ($142.67 – $36.66) / $142.67 is 0.743, or 74.3%. That's the savings of buying all store brand instead of buying all name-brand.
That was quite a difference! I've mentioned trying out generic or store-brand items as a money-saving activity – as have lots of other people before me – but paying a quarter on the dollar was more than I thought could be saved by switching to store brand.
I spot-checked the receipts and a few of the items, and it did look like the store did a fair job comparing name-brand apples to store-brand apples. The sizes of corresponding items looked the same, and it appeared they used the retail price for all items in calculating the respective totals. (I mean, they could have “fixed” the prices when they printed out the receipts, but that seems like too much trouble.)
One thing they didn't do was use the “MVP” price for all of the items. (The Food Lion shopper's card is called the MVP Card.) I could see on the receipts that there was a higher percentage of name-brand items that were eligible for MVP discounts than there were store-brand items eligible for the discounts. I know from experience that the name-brand items on average have better MVP discounts than the store-brand items. So, using the MVP pricing on the two carts likely would have made the store-brand savings less.
But even if it cut the margin in half, saving over a third by switching to store-brand seems to be a relatively painless way to save quite a bit of money.
Another interesting fact about store brands is that the quality of store brands has improved dramatically for a few reasons in particular.
Supermarkets are now using their store brands as a way to lure buyers away from their competitors. Previously the major chains have competed on price, selection, cleanliness, freshness of produce, etc.
Now in an increasingly competitive environment, grocery stores are using their line of store brand products. If they can get you hooked on their store brand pasta, cookies, or juice drinks then you may drive right past their competitor to purchase these items.
Second, supermarkets are getting tired of acting as landlords to the major brands by "leasing" them their valuable store space. Why not make a greater profit by selling their own brands instead of meager profit by lending space to the major brands. In fact, many grocery chains have actually opened their own manufacturing facilities to make their own food to sell in their stores.
With these reasons in mind, grocery stores have a more vested interest than ever in making sure their store brands are of the highest quality. As a result the consumer wins big.
Good point about the MVP card. I could believe the 74% argument if the comparison was store-brand vs regular price name-brand. But I hardly ever buy anything that is not on sale. Frequently the name brands are on sale cheaper than the store brand. I noticed this at the store the other day. Ocean Spray Cranberry juice, regularly $2.99, on sale for $1.88. Sitting next to it, store-brand cranberry juice for $2. In addition, name-brands have coupons, store-brand coupons are rare.
I think you have a very valid point – not only is store brand a great value but most are pretty good quality as well. but don't forget the almighty coupon. Often with a coupon and a sale being run by the store you can get the name brand at a great value for those shoppers that have to have the name brand and don't be afraid to stock pile when you have a great deal on a non perishable item.
The name brands aren't such a bad buy if you purchase them on sale, usually then they'll be cheaper than the generics. Thus, that's the only time I really buy name brand, and the difference is very negligible.
Many store brand items are made and packaged by the name brand company. Just found your site, great post.
Store brand items are indeed manufactured by their name brand competition. They use lower quality materials or 'water them down' to afford you a cheaper price.
I'll buy name brand items if I particularly like that food. For example – I can't stand great value hamburger helper; so I buy the name for that.
Check out the prices before you assume you're getting a deal though. It's kind of like when you see a display that says something is 2 for $5. More often than not that item is NOT on sale. It's regular price is $2.50, but people will buy more because they think they're getting a deal.
I… wow. That's kind of incredible. That's an instant way for me to save a thousand bucks a year. Thanks. =)
Good post. I also found that Wal-Mart really did have MUCH cheaper groceries (even on name brands) than Kroger or Publix. I did a grocery challenge and posted my results on my site.
http://www.beefupyourpiggy.com/2008/11/grocery-ch…
You guys are lucky in that there is real competition from the store brands. In our small market that is New Zealand, the store brands only cover the obvious things: cornflakes, pasta, baked beans, bread. In the UK you can pretty much get store brands for almost anything and I'd love it if we could get that too – alas, our market is not big enough.
Good post. The 74% may be a bit too high, but I’ve been buying store brands (from Wal-Mart) for a while, and the savings do add up.
I’ve noticed that the biggest difference is in pharmaceuticals (generic Excedrin costs half as much as the name brand), but even normal items like generic sour cream can save you a $1 on one container.
And a previous poster is correct…most store brands are actually manufactured by a name brand producer.
Every penny we save in this economic downturn is valuable. That's why store brands are heaven-sent if you think about it. First, they encourage competition with larger suppliers and competition is always good in bringing down market prices. Second, you are still assured of good quality products because the stores won't risk tarnishing their image by selling low-quality goods. Third and most important of course is the huge savings you make.
Wow, i guess if you have debt problems and are looking to save some money then it really makes sense to switch to own brands – the amount that you can save is truly amazing!
Thanks for this article.
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