Market Basket Analysis Shows Savings Continue for Consumers Buying Store Brands

Jul 13, 2009, 11:27 ET from Private Label Manufacturers Association

NEW YORK, July 13 /PRNewswire-USNewswire/ -- 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.

Click to Download full release and price comparison chart for the typical market basket

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Brian Sharoff

SOURCE Private Label Manufacturers Association