Name brand or private label? The difference and why more consumers are opting for generics

Regardless of where you live in the US, chances are you’re in the supermarket aisle, comparing prices on generic items with brand-name products. You are not alone either. Private label sales increased by 6% in 2023, according to a report published by Circana. This increase is telling; More consumers are purchasing generic and private label items in recent years than ever before. But is there really a difference between famous brands and generic store brands?

This week, we’re going to discuss why people are buying generics – and why, if they haven’t already, maybe they should too.

The benefits of going generic – and the differences between generic and name brands

The first and most obvious benefit is that generic and store-brand items are cheaper than brand-name items. According to some CNET studies that analyzed several supermarkets in the United States, generic items are 40% cheaper than branded ones, on average. Statistics don’t lie; If you’re still in the habit of buying mostly brand-name items, I recommend you try buying only generic items. Consider making at least one trip to the supermarket where you exchange your normal branded products for own brand products – compare the receipt you receive after buying only generic products with the older ones where you bought branded and you will see the difference.

Another thing to consider is that many generic and store brands manufacture their foods and products on exactly the same production lines as the famous brands. This is a common practice that is no secret. What this means is that you’re not paying for an entirely different standard of quality when choosing branded items; Generic items are made with the same ingredients, often in the same factories.

The benefits of going generic are quite obvious and well known. And the statistics are clear; According to an article published by Ramsey Solutions, you can save $500 a year on dinners alone by switching to generic products. Imagine how much you could save if you also chose generic items for all your meals and snacks, in addition to household items?

The truth is that the biggest and most notable difference between generic brands and name brands is not quality; is the price.

Why do some people prefer famous brands?

Some people are open to purchasing basic items from generic brands such as paper products, trash bags, beans, rice, baked goods, etc. However, these same people may be hesitant to give in when it comes to switching from their favorite brands to generics. options.

If you’re someone with a few brands you need to follow, I again encourage you to give it a try. For example, let’s say you have very serious brand loyalty to a certain brand of ketchup. Save some of the brand-name ketchup you currently have on hand and go ahead and buy that generic bottle you refused to buy in the past. Do a blind taste test (and I’m serious). If you can really tell the difference, hats off to you. But if you can’t, I would encourage you to abandon brand loyalty.

Now, having just one brand that you are dedicated to is not a big deal. However, if there are multiple brands that you are loyal to, I would seriously consider doing these blind taste tests and asking yourself if the cost difference is worth it. If you do the taste tests and can’t guess which item is which, it may be time to abandon brand loyalty.

Should you be generic?

Of course, my answer is a resounding yes. More and more consumers are realizing that there are actually not that many differences in quality or flavor between famous brands and private labels. If you can save hundreds of dollars a year just by switching to generic items, you should.

Another point I want to mention is that because these store brands are owned by the stores you’re shopping at, you’ll often see sales and even BOGO deals on these items that you might not see as often on their brand-name counterparts. . This is because contracts between brands and retailers may stipulate how often sales of their items can be made, as well as how many units stores must sell before doing so. Stores may have more freedom to maintain perceived savings when selling their own branded items.

If they have a lot of inventory, they will run BOGO sales or special offers, and they will do so as often as necessary to keep the inventory moving. This is a great advantage that benefits us, consumers. So, not only are you already spending less because you are buying generics, but you are also putting these items on sale.

Final considerations

I know brand loyalty is a hard habit to break, especially if you’ve been buying these brands for a long time. However, remember that nostalgia and emotional biases can influence our purchasing habits, and companies know this. (Why do you think so many famous brands have introduced “limited time throwback” brands and labels in recent years?)

Of course, what you buy is up to you. But one brand at a time, I encourage you to at least try the generic option, and do so without prejudice. Chances are, for most items, you will end up realizing that you are spending more than necessary on name brands.

Josh Elledge is a syndicated newspaper columnist with more than 12 years of experience covering consumer protection. Her work highlights money-saving skills, strategic shopping, and financial life hacks.