Store v. Name Brands: Should You Go Generic?

If you’re still embarrassed or worried about the quality of no-frills store brand products or generics instead of those with brand names, face it: You’re in the minority now.

In fact, 55% of grocery shoppers say they frequently purchase store brands, and more than 77% say the store brands they buy “are as good as, if not better than, national brand products,” according to a survey commissioned by the Private Label Manufacturers Association, an organization that represents makers of store brand food, beverages, health and beauty aids and over-the-counter drugs. And in this economy, it’s no surprise.

The Store Brand Secret
Many of the national brands actually produce store brand products, so besides the packaging, you may not even notice a difference between generics and their brand name counterparts.  For example, Alcoa (Stock Quote: AA), the maker of Reynolds Wrap Aluminum foil, produces store brand foil. McCormick produces herbs and spices without its signature label, and Birds Eye, known for its frozen vegetables, produces a number of frozen and canned vegetable products, according to Consumer Reports.

One major reason for the deep discount on store brands is they “don’t carry heavy product development, advertising and promotion costs,” says Tod Marks, a Consumer Reports researcher who blogs by the name “Tightwad Tod” on ConsumerReports.org.

What You Save
By choosing store brand products from retailers such as Costco (Stock Quote: COST), Wal-Mart (Stock Quote: WMT) and Kroger and Winn-Dixie (Stock Quote: WINN) instead of buying national brands, you can save about 30% per week on the average shopping trip, according to the Private Label Manufacturers Association.

“Prices may vary from market to market, but the savings that consumers will achieve will follow the same pattern across the country,” says Brian Sharoff, president of the association.

Buying generic soda instead of Coke (Stock Quote: KO) or Pepsi (Stock Quote: PEP) can save you between 50% and 60%.  So can health and beauty products like aspirin, nasal spray and lotion. Picking up generic cereal and ice cream could save you more than 30%. You can save about 23% on store brand frozen pizza and more than 25% on dog food by going generic, according to the association's data.

Online shoppers can benefit from store brands as well.  Drugstore.com shoppers (Stock Quote: DSCM) who buy 24-hour Claritin pay $31 for 45 tablets, but they can get 120 tablets of the Rite Aid (Stock Quote: RAD) generic version, loratadine, for a dollar less.



How They Stack Up
Many household products hold up just as well as brand names, according to studies by Consumer Reports. Kirkland Signature Premium paper towels from Costco work just as well as Bounty, the popular Procter & Gamble brand (Stock Quote: PG), and Great Value Slider food storage bags from Wal-Mart are just as durable as Ziploc Easy Zipper bags made by S.C. Johnson.

In addition to household products, some store brand foods have passed Consumer Reports taste tests, proving that they’re just as good as national brands.  Instead of Kellogg's Mini-Wheats, you can try Kroger Mini-Wheats, or instead of Kellogg's Frosted Flakes, you can opt for Malt-O-Meal Frosted Flakes, Consumer Reports says.  For oatmeal, try Wal-Mart’s Great Value Quick Oats 100% Natural or A&P’s America's Choice Instant Maple & Brown Sugar oatmeal.  Kroger’s Self-Rising Crust 4-cheese Pizza and Winn-Dixie’s Prestige Premium chocolate ice cream were also highly rated in taste tests.

When Store Brands Don’t Cut It
If you’re particular about the tartness of A1 Steak Sauce or the exact flavor of Miracle Whip, generic options may not be right for you. Store brands that emphasize value may contain cheaper ingredients, and even when national brands manufacture a different type of product to be sold as a store brand, they make it to the store’s own specifications, which could mean a change in ingredients, Consumer Reports says.

Check the ingredients list, take a look at the product itself if you can and decide what qualities you’re willing to give up for the savings.  And If you’re partial to Kleenex Cottonelle toilet paper with Aloe and Vitamin E, you may not be able to find a suitable generic. But if you’re really trying to cut back on spending, the store brand may be good enough.

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