Saving with Store Brands

November 4/Drug Law Weekly -- With the kids back in school and winter just around the corner, a new survey of supermarket prices on 25 commonly purchased items found that shoppers could save more than 35% by buying the retailer's brand instead of the national brand.

Store brand breakfast cereal and refrigerated orange juice cost only $4.91 in the store survey compared to $7.13 for the same national brand products.

Lunch options saved $3 by choosing the store brand. Hot dogs and hot dog buns, along with a 12-pack of soda costs $10.53 for the national brand items, but $7.52 for the private label products.

Store brand savings go beyond the food aisles.

The research, conducted by the Private Label Manufacturers Association (PLMA), tracked the pricing on grocery and household items at a typical supermarket. The results indicate that consumers buying the store brand would save $32.93 on average on the total market basket, representing savings of 35.3% when compared to weekly purchases of national brands in the same categories.

Included in the survey were food items such as fruit cups, peanut butter, grape jelly and juice boxes, in addition to non-foods such as vitamin C, cough drops and facial tissue. Savings on individual products ranges from 13% (hot dogs) to 66% (nasal spray).

A leading national brand product was compared to a similar store brand product in each category and prices were adjusted to account for all known discounts, coupons and promotions available for each of the weeks included in the study. The survey was repeated on a weekly basis during a recent four-week period in a suburban supermarket located in the northeast.

Annual sales of store brands have climbed to $85 billion in 2009, according to the latest industry statistics, and the products accounted for an unprecedented 23% of items sold in U.S. supermarkets. Rather than a temporary effect of the economy, there are indications that retailers are winning new adherents to their brands -- even among die-hard national brand loyalists.

Demonstrating the products' growing appeal to America's shoppers, the October 2009 Consumer Reports magazine documented in blind tests how consumers time and again found that retailer's brands were equal to or better than leading national brands in terms of taste.

A recent study by GfK|Roper found that 91% of shoppers who say they switched from buying name brands to buying store brands during the past year will continue buying the store brand after the recession ends. Based on a poll of 800 grocery shoppers, the survey identified quality as a major factor influencing the decision to purchase store brands.

From the November 9, 2009, Prepared Foods E-dition