Save on groceries : buy the store brand
Posted by Tad Johnson - Mar 4th, 2008 at 23:03Here’s a fun little secret about groceries : nine times out of ten, the name brand and the store brand product are virtually identical. The only real difference is that one costs 20% more. In fact, most packaged food products are processed at the exact same facilities using the same ingredients. The only thing you’re buying by paying more for the name brand is just that–the name.
As with all things, there are some cases where the flavor or quality is noticeably different. Cheerios and the generic equivalent are going to taste the same (toasting oats is not rocket science). The store brand Honey Bunches of Oats might not have the exact flavors or ratios down, so this might taste a little different. Even so, is it worth the added cost?
Knowing full well that their products are generally indistinguishable from the cheaper store brand, the major food companies spend millions (or is it billions?) every year on marketing. There are some very smart people getting paid very well to convince you that Pop-Secret popcorn is better than the generic. The irony to this is that the reason they charge you more is (in part) to cover their advertising expense. Since the store brands never advertise, you pay only for the food itself.
In the case of over the counter medicine, the savings are even better. Once a drug enters the generic market, you can buy a store brand of the exact same drug for 50% or less. It’s truly remarkable.
Armed with this knowledge, think carefully next time you’re shopping for groceries. You just might discover that you can save an extra $20 a week by switching to the store brand. And as we know, that makes a nice addition to your Roth IRA or 401(k).
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I agree that buying generic is a great money-saving tip, but don’t forget about checking price-per-volume! You often get a better deal when you buy more of something, especially on things like cereal and pain relievers. Combine the magical forces of bulk shopping and generic brands and you just may double your savings.
Comment by devin — March 5, 2008 #
Great point, Devin. Along with advertising, food makers are very crafty with their packaging. It’s often deceiving how much actual food you’re buying–fortunately most (all?) grocery stores report price-per-volume on the tag.
Comment by Tad Johnson — March 5, 2008 #