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Market Basket Analysis Shows Savings Continue for Consumers Buying Store Brands

Supermarket shoppers continue to reap sizeable savings on products throughout the store when choosing the retailer’s brand, but it also seems the price difference vs. national brands is not their only motivation.

Despite an increase in couponing and price promotion by national brands, the latest market basket research by the Private Label Manufacturers Association documents that shoppers can still lop 30% off their grocery bill by purchasing store brand products in their weekly trips to the supermarket. The savings were virtually identical by percentage to results from a similar study released by PLMA four months earlier.

Meanwhile, a recent poll of consumers shows that the quality of store brand products is a big factor in convincing shoppers to keep buying them. In a survey by GfK Custom Research North America, 9 in 10 shoppers agreed that the store brand products they buy are as good as or better than national brand products, and the same percentage said they will keep buying store brand products after the recession ends.

Conducted over a six-week period, the research on consumer savings tracked prices on 42 basic grocery and household items at a typical supermarket. The results indicate that consumers buying the store brand would save $40.91, on average, on the total market basket, representing savings of 30% when compared to weekly purchases of national brands in the same categories.
Products comprising the typical market basket included staple food items like breakfast cereal, peanut butter and orange juice, in addition to non-foods such as bathroom tissue, paper towels, aspirin and mouthwash. A number of seasonal items such as hot dogs and rolls, pickles, iced tea mix, barbecue sauce, bagged salad, charcoal, aluminum foil, and paper plates were also tracked for the study.

In total, 31 of the 42 food and non-food items PLMA examined saved consumers more than 20% off their grocery bills. In 23 categories – more than half of those tracked – the savings exceeded 30%, and nine of the products saved shoppers over 40%.

PLMA’s 6-week price comparison research was conducted in a typical suburban supermarket located in the northeast. The survey was repeated on a weekly basis during the 6-week period from April 18, 2009 through May 23, 2009.

A market basket featuring 42 frequently purchased products from both food and non-food categories was used. 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 Private Label Manufacturers Association is the industry trade association devoted exclusively to store brands. Founded in 1979, PLMA today represents over 3,000 companies who are involved in the manufacture and distribution of store brand products. The products supplied by PLMA members include food, beverages, snacks, health and beauty aids, over-the-counter drugs, household cleaners and chemicals, outdoor and leisure products, auto aftercare and general merchandise.

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Christopher Durham
Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.