Saturday, February 11, 2012

Buying Generic Groceries Doesn't Save Shoppers As Much As It Used To

Here is an interesting story from the Consurmerist about the effects of the Great Recession on American grocery shopping habits:
Used to be, back in the days of yore, shoppers looking for a deal in the grocery store could go for a generic store brand item instead of the more expensive name brands. But lately the gap between those two options has been narrowing, to the point where store brands sometimes even cost more than their previously pricier counterparts.

Many consumers turned to the tactic of store brands during the recession, to the point that now, a lot of us actually prefer our generic items for the basics at the grocery store and have become loyal to those brands instead.

According to the Wall Street Journal (via Time), stores have caught on and are raising the prices of their private-label goods, to the tune of 5.3% on nonperishables and a whopping 12% for perishables. Name brand prices aren't rising at the same pace, at only 1.9% and 8% on those respective categories, but still cost on average about 29% more than generic brands.

Stores have caught on and updated their boring, bland brand labels and created more exciting, attractive packaging for their products. And they're not afraid to price those items above their name brand counterparts. For example, Target's Archer Farms line of snacks and drinks are easily recognizable and loved by customers for their pretty logos and familiar branding.
So, it will probably just be a matter of time before some company starts marketing a GENERIC generic line of grocery products. No wonder long time beloved brands like Hostess and Kraft are reeling these days.

Bonus: This song is so Low Budget that it's still on vinyl!


  1. Great retro music choice! Keep digging, so these gems aren't lost forever.

  2. They'll be raising name-brands too. I'm surprised restaurant prices aren't higher, in many cases it's cheaper to buy take-out food than groceries, which is crazy. I wonder if they are just afraid to pass costs on to customers, because once they lose them they may not come back. So maybe they're just holding on hoping costs will go down.

    Meanwhile, manufacturers continue to reduce the size of packages. I just bought some fresh linguine from the dairy section and it's 2/3 the size it used to be a few weeks ago! grrrr.

    Well, I just came across a paper from Princeton (link below) which I'm in the process of working into a blog post but I'll put a little excerpt here since we're on the topic of food prices.

    Keep in mind, that although this study looks at 4 crops in Asia (soybeans, corn, wheat and rice), the problem of background ozone is most definitely one of global dimensions, and damages every sort of plant to one degree or another. Notice the emotionally laden word, rarely seen in science, TREMENDOUS, and check out the percentages in yield reduction and economic losses. It's titled:

    Characterizing distributions of surface ozone and its impact on grain production in China, Japan and South Korea: 1990 and 2020

    Using an integrated assessment approach, we evaluate the impact that surface O3 in East Asia had on agricultural production in 1990 and is projected to have in 2020....We find that given projected increases in O3 concentrations in the region, East Asian countries are presently on the cusp of substantial reductions in grain production....We conclude that East Asian countries may have tremendous losses of crop yields in the near future due to projected increases in O3 concentrations....Between 1990 and 2020 grain yield loss due to O3 exposure is projected to increase by 35%, 65% and 85% in Japan, Korea and China, respectively, with resulting economic costs increasing by approximately the same amount.

  3. Maybe there can be further cost-savings by just dumping day-old food directly into giant bins out back and “shoppers” can just come along and bag it themselves. Oh wait...they are doing that already aren’t they?

  4. This is true; I work at Target and see this quite a bit. Just the other day, I saw that the Market Pantry pie filling (note that this is Target's generic brand, whereas Archer Farms is their "upscale" grocery brand) cost more than the Comstock filling. I also see a lot of the "hidden inflation" taking place; by that, I mean, I'll stock things and see that the older items that are already on the shelf are larger than the ones I'm taking out of the box.