Store Brands Give Name Brands a Run for the Money

As if price-conscious shoppers needed more convincing, a new study published in the October issue of Consumer Reports magazine states "store brand products can compete with their name-brand counterparts and save shoppers more than a thousand dollars a year on grocery bills." According to Tod Marks, senior projects editor for the magazine, "The study reaffirms that store brands are worth a try."

Five supermarket chains were evaluated and prices for private-label or store-brand vs name-brand items were compared for 30 everyday items. Consumer Reports found the average savings with store brands was 30%, while its researchers found nutrition similar for most of the tested products.

Yet, shoppers need coaxing to trust some store brands — many, ironically, created by big name brands.

"Although they'll snap up store-brand paper goods and plastics, at least half of our survey respondents rarely or never buy store-brand wine, pet food, soda, or soup," Consumer Reports noted. "That may be especially true when the category includes a name-brand superstar such as Coca-Cola or Campbell's."

Store brands have grown in popularity during the recent recession. Some 84% of U.S. shoppers bought store brands in the past year, and 93 percent of those who purchased store brands said they would keep buying them even after the economy recovers. Nationally, almost one in four products sold in supermarkets are store brands, accounting for a record $55.5 billion in sales last year, according to Consumer Reports.

As for taste, national brands still edged out store brands, but not by much. Consumer Reports tested 21 brands in head-to-head taste match-ups. The national brands won seven times, the store brand beat out the national brand three times, and the remaining eleven tests resulted in ties. Hellmann's mayonnaise topped Jewel, Land O' Lakes butter beat Wegman's, and Bumble Bee tuna trounced Target's Market Pantry. But Food Lion's Lotsa Noodles soup was preferred over Campbell's Chicken Noodle, Publix Premium orange juice bested Tropicana, and A&P brand America's Choice hot dogs beat out Oscar Meyer.

Consumer Reports noted that some store brands are actually manufactured by companies that also make nationally-recognized brands, accounting for similar quality. The magazine also said that the price difference between store brands and national brands may be narrowing because national brands have found it necessary to lower their prices or make promotional offers to remain competitive.

Based on its survey, CR concludes that "there's no reason store brands shouldn't hold their own against the big boys. After all, some of the same companies manufacture both. Among the big names that also make store-brand products: Sara Lee (baked goods), Reynolds (wraps, storage containers), 4C (bread crumbs, iced tea, soup mixes), McCormick (seasonings, extracts, sauces, gravies), Feit (lightbulbs), Manischewitz (frozen appetizers, soup mixes, side dishes), Joy Cone (ice cream cones), Stonewall Kitchen (gourmet condiments, specialty foods), and Royal Oak (charcoal)."

Interestingly, two examples of a different type of store brand—"second tier" brands, which may cost even less—fared worse in CR test, and indicate one category that may not stick with price-conscious consumers: the second-tier Kroger Value Sandwich Singles Imitation Pasteurized Process Cheese Food and Albertsons-purchased Shoppers Value creamy peanut butter.