Nine ways to supermarket savings

February 24, 2009 5:05:38 AM PST
Call them store brands, call them private labels -- but whatever you do, don't call them "generics." [SIGN UP: Get headlines and breaking news sent to you]

It's a word that consumers often use to refer to low-priced products made directly by retailers -- like Target's Market Pantry Brand or Wal-Mart's Great Value Brand -- but the term makes store executives flinch, says retail expert Jim Hertel.

Hertel, the managing partner of the Illinois-based consulting firm Willard Bishop, said that "generics" conjures unpleasant memories of an earlier era.

"Back in the late '70s, early '80s, no-name generics were there -- the white box with the black letters on it," he said. "The product quality in those things was suspect, at best, and I think it's taken years, if not decades, for the industry to kind of crawl out from that."

Hertel said that, over the last decade, the quality of lower-priced, store-made items has improved and their sales gradually climbed. These days, with the recession in full swing, even more consumers are making the switch.

"It's just accelerated since the economy really tanked," he said. "I think this is going to be really a defining moment for national brand suppliers."

Some retailers, besides offering their low-priced store brand goods, have also established "value-added" brands that come with higher prices -- sometimes even exceeding those of national brands -- but also feature higher quality or unique ingredients.

Target's Archer Farms brand, for instance, includes pasta sauce that's more than twice as expensive as its bargain-priced Market Pantry brand. On its Web site, Target advertises Archer Farms products as being "of the highest quality," and "made with the finest ingredients."

Premium brands, Hertel said, help build customer loyalty. They "can provide the consumer with unique benefits, creating the possibility of a repeat trip," he said.

National brand suppliers, meanwhile, have maintained that they are still competitive with store brand goods.

A.G. Lafley, the chief executive of Procter & Gamble -- the company behind more than 100 name brands, including Bounty paper towels, told attendees at a lecture sponsored by The Wall Street Journal last spring that he believed consumers would stick to name brands instead of generics. Lafley said that, while his company's products might cost more, consumers are familiar with their quality. With a store brand, there is no such guarantee.

If you're willing to try out an unfamiliar store brand product, exactly how much will you save? To find out, compared prices last week for national brand and store brand products at three major retailers in northern New Jersey: a Target in Jersey City, a Wal-Mart in Secaucus and a Stop & Shop in Clifton. We also calculated which store offered the lowest total bill for nine common household items and goods. Interested in what we found? See the next page.

Nine Different Items, Many More Different Prices

Aluminum Foil, 200 Square Feet

Wal-Mart Store Brand Aluminum Foil

Stop & Shop
Store Brand: $5.99
Reynolds Wrap: $8.49

Store Brand: $6.39
Reynolds Wrap: $7.39

Store Brand: $6.32
Reynolds Wrap: $7.37

Apple Juice

Stop & Shop Brand Apple Juice
Stop & Shop
Store Brand, 64 oz: $2
Mott's, 64 oz: $2.99

Store Brand, 64 oz: $2.34
Mott's, 64 oz: $2.59

Store Brand, 96 oz: $1.97
Mott's, 64 oz: $2

Bottled Water

Stop & Shop
Store Brand, 24-Pack: $4.69
Poland Spring, 24-Pack: $5.49

Store Brand, 24-Pack: $3.99
Poland Spring, 24-Pack: $5.49

Store Brand, 24-Pack: $3.98
Aquafina, 24-Pack: $4.98

Chocolate Chip Cookies

Target Store Brand Chocolate Chip Cookies Stop & Shop
Store Brand, $2.59
Chips Ahoy, $2.50

Store Brand, $1.99
Chips Ahoy, $2.54

Store Brand, $1.12
Chips Ahoy, $2.50

Macaroni & Cheese

Stop & Shop
Store Brand, $0.60
Kraft, $1

Store Brand, $0.64
Kraft, $1

Store Brand, $0.50
Kraft, $0.50

Paper Towels

Stop & Shop
Store Brand, 8 Rolls: $7.49
Bounty Giant Rolls, 8 Rolls: $12.99

Store Brand, 8 Rolls: $6.99
Bounty Giant Rolls, 8 Rolls: $10

Store Brand, 9 Rolls (3 Packages of 3 Rolls): $5.52
Bounty Basic Giant Rolls, 8 Rolls: $8.00

Peanut Butter*
Wal-Mart Brand Peanut Butter

Stop & Shop
Store Brand, 28 oz. jar: $3.49 or $0.12 per ounce
Skippy, 28 oz. jar: $3.79 or $0.14 per ounce

Store Brand, 18 oz jar: $1.64 or $0.09 per ounce
Skippy, 16.3 oz jar: $2.09 or $0.13 per ounce

Store Brand, 18 oz: $1.64 or $0.09 per ounce
Skippy, 16.3 oz: $2.08 or $0.13 per ounce

*Since the Stop & Shop store brand peanut butter and the Stop & Shop Skippy peanut butter listed here come in significantly larger jars, we are using approximate per ounce price for comparison purposes.

Pasta Sauce

Stop & Shop
Store Brand: $1.50
Ragu: $2.50

Store Brand: $1.17
Ragu: $1.79

Store Brand: $1.17
Ragu: $1.50

White Bread

Stop & Shop
Store Brand: $1.39
Wonder Bread: $3.19

Store Brand: $1:49
Wonder Bread: $3.19

Store Brand: $1.42
Wonder Bread: $2:35

The Total Bill: Your Savings

While it might be tough to judge the value of what you buy at each store, Wal-Mart emerged as the clear winner when it came to prices. For all nine products, the total Wal-Mart tab for store brand goods was $23.62, with a larger bottle of apple juice (96 ounces) to boot. Meanwhile, when we compared a retailer's name brand goods to its store brand goods, Stop & Shop provided the largest savings -- the Stop & Shop items were a total of more than $13 cheaper than the store's name brand items.

The results:

Stop & Shop Store Brand: $28.41
Stop & Shop Name Brand: $41.67

Total Stop & Shop Store Brand Savings: $13.26

Target Store Brand: $26.62
Target Name Brand: $36.33

Total Target Store Brand Savings: $9.71

Wal-Mart Store Brand: $23.64
Wal-Mart Name Brand: $31.28

Total Wal-Mart Store Brand Savings: $7.64

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