Not long ago, supermarket house brand foods were easily detected by their lame packaging, if not the groans they elicited from kids forced to eat the cheap knock-off goods. Times have changed.
Store-brand hot dogs, orange juice, canned chicken soup, and other foods have scored well in blind taste tests when matched up against big-name national brands, and because the generic stuff costs much less, switching to off-brand merchandise has become an obvious way to save at the supermarket since the economy turned south.
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Realizing that store brand purchases are surging, and that sales growth could rise even further, grocery stores are putting serious money and effort into developing and marketing “no-name” items. Something of a generic-food renaissance is taking place, and the hope is that the combination of newly cost-conscious consumers and vastly improved quality of foods will bring store brands even broader appeal.
A new BusinessWeek story highlights the store-brand push at supermarkets such as Safeway and Kroger. At Safeway, for instance, sales growth of store brands is outpacing national brands by a ratio of 3 to 1.
What’s particularly interesting—and what demonstrates a new era in which consumers aren’t choosing store brands strictly because of price—is that supermarket house brands don’t have to be cheap to sell well:
Kroger introduced the “Private Selection” line of oval-shaped, thin-crust pies. The pizzas, topped with mozzarella, grape tomatoes, and aged parmesan, are $5.99, the same as Nestlé’s DiGiorno pies—a testament to the store brand’s cachet. Now 60 percent more of Kroger’s higher-end shoppers buy the pizza.
In 2003, 23% of Kroger’s sales came from store brands; today, that figure is up to 28%. Consumers have come to expect better quality from store brands. They’re finding more quantity of store-brand items in grocer aisles as well: Of the 14,000 new foods and beverages introduced in 2011, nearly one-third (31.4%) have been generic supermarket house brands.