Grocery Store Guru

All about the grocery industry, from a store level perspective.

Store Brand Products and Why I Buy Them

Store brand products (also known as Private Label) is the ultimate trade off between consumer and retailer. The consumer gets a product that’s usually comparable to the national brand for less money, and the retailer makes more profit.

Wait. More profit?

When you look at pretty much any section in the grocery aisles, the profit margin is ALWAYS highest on the store brand products that you see – even though it’s likely the cheapest thing on the shelf. That’s why the grocery retailers push their own brands so hard. They’re usually heavily featured in the inside pages of the flyer (after all of the loss leaders). You can be guaranteed that when you visit the store, you will find off-shelf displays of  private label products. Next time you’re in whichever store you choose to shop at, count how many store brand products are on the end-cap displays at the ends of the aisles. You’ll be amazed.

Believe it or not, the fact that the retailer makes more money on the stuff is one really big reason that I am willing to try the store brand version of pretty much anything. The retailer has a vested interest in getting you to switch to their store brand, and they look after the quality of their store brand products. Most now come with a 100% satisfaction guarantee to back it up, too.

Still, many customers question the quality of the store brand. If it’s a decent product, why is it so cheap?

The answer lies in the cost to bring a product to the market. Companies spend millions of dollars an advertising, just to get you to pick up their products. Someone has to sell this product to the grocery chains, or to distributors. Package designs are heavily researched and test marketed… the list goes on and on. These costs are factored in to the price you pay at the register for any national brand product.

Private label products eliminate almost all of the marketing costs associated with a product. These cost savings are then passed on to the consumer through a reduced retail.

Pop is a great example of branding and marketing. In most markets in north america, Coca Cola is the number one pop brand. Pepsi is usually in second place – although in some markets during the ’90’s, Pepsi was number three! So who is the huge company that is number three in north america, and was number two in a few markets during the ’90’s ?

Cott Beverages. Ever hear of them? Probably not… you’d have to search pretty hard to find any pop bottle with their company name on it. But Cott produces most of the store brand pop in the market, and it’s all a heck of a lot cheaper than Coke or Pepsi. Makes a big difference when you aren’t spending the millions of dollars on commercials and the like.

That also ties into another reason that I like to give store brand products a chance. There’s lots of smaller food manufacturers out there that aren’t interested in spending all of those marketing dollars. They would rather put their time, effort and dollars into making high quality, great tasting foods. Many of these companies go the private label route, selling their products to retailers rather than to the general public.

A great example of this is Belmont Meat Products. They make some of the best hamburgers I’ve ever tasted… but you won’t be able to find them without help! It’s not that they’re not readily available, they’re just not usually labeled with the name Belmont. But if you’ve eaten a few different varieties of hamburger that M&M Meat Shops has to offer, chances are you’ve had a burger made by Belmont.

I hope I’ve convinced some of you to try the store brand… it’s terrific when you find a product you really like and costs you significantly less. And if you don’t like it, you have a 100% satisfaction guarantee to fall back on. Either way, you have nothing to lose.

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October 20, 2011 - Posted by | Products

1 Comment »

  1. This is a very interesting and informative post! I had no idea why store brands are so much less expensive. But I’ve been buying store brands frequently, because the ingredients for instance of some medications are exactly the same as the brand name, yet they’re much less expensive. Or band aids etc.

    I just wished there were store brand gluten free products in the freezer! Because those cost an arm and a leg.

    By the way, I’ve found that I can’t buy M&M burgers or hot dogs, because anything they make that takes processing has wheat in it.

    Comment by Ursula | April 19, 2012 | Reply


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