Store Brands Retain Sales Edge Over Name Brands
Market research has indicated that store brands have held their ground during the recession, even taking over a significant portion of the market share of name brands. According to a study by Accenture, a management consulting firm, 87% of shoppers prefer name brand products if the price is the same as store brand. However, two thirds of shoppers are now choosing store brands due to the lower price. The study also revealed that 38% of consumers perceive the store brand as just another brand.
Top reasons consumers buy store brands:
- Price – The #1 reason given for buying store brands is price.
- Quality – 50% believe the quality is as good as the national brand.
- Trust – 42% trust the retailer.
- Preference – 28% buy store brand because they actually prefer the store brand.
I would concur with all of the top 4 reasons for this gain in the battle of store brand vs. name brands. Just yesterday in Kroger in Dallas, I was reminded of the value of store brand with a jar of peanut butter. Kroger’s brand and Skippy were both on sale for $2.50. So the decision could be clear… choose the name brand Skippy. Not so. Many store brands have not fallen to what we call “shrinking groceries”. The Kroger peanut butter was still 18 ounces, while Skippy has shrunken to 16.3 ounces. Ok, so buy the Kroger brand! Hold on a minute… If I had a coupon for Skippy, I would have bought it, as it would have been cheaper than Kroger brand on sale even with the size difference. But I didn’t have a coupon, and I didn’t need peanut butter. So I bought neither.
Given that we as consumers have concluded that store brand is now great quality with some of us even preferring it, smart shoppers should be guided by these two rules of thumb:
1. Check the cost per ounce on both. When name brand is on sale it may beat the price of store brand at regular price (when store brand is not on sale).
2. Coupons change the math in favor of name brand. When name brand is on sale with a coupon, it will most often beat the store brand, even when the store brand is on sale.
Now, either way, you can enjoy your bargain peanut butter or anything else that goes into your cart, without compromise.
For more info, here’s our “31 Days To Save” video on “Store Brands”.