Posted: 15 Sep 2009 05:00 AM PDT
The October 2009 issue of Consumer Reports contains an article extolling the virtues of generic store-brand products. While shoppers used to sacrifice quality when choosing generic, that's no longer the case. From the article:
In other words, store brands offer roughly the same quality as national brands, but at a much-reduced cost. How much reduced? Consumer Reports says that the store brands they tested cost an average of 27 percent less than the name brand equivalents.
How much can you save?
I spent an hour in each store, roaming the aisles, looking for representative prices on a variety of items. I tried to pick one item at random from every section of the store. When I'd finished, I had a list of 25 products for which each store carried the same name brand and their own store-brand equivalent.
The results actually surprised me. You can save a lot of money with store-brand products — far more than I suspected. Here's the raw data from my research:
The first column lists the name-brand item I used as a basis for comparison. I've given each store two columns, one for the price of the name-brand item, and one for the generic item. On each line, red text indicates the highest-priced option and green text indicates the least expensive option.
Here's a closer look at some of these comparisons:
You get the idea. Buying store brands at Safeway would save nearly 22% for the items on this list. At Fred Meyer, I could save over 36%. And Fred Meyer store brands cost 44% less than name brands at Safeway — without the need for a "loyalty card".
A note on methodology: While conducting this survey, I faced a tough choice. Which price should I list? The non-sale price for each item? Or the sale price? Of the 25 name-brand items listed, 15 were on sale at Safeway and 14 were on sale at Fred Meyer. (There was a lot of overlap on the sales, too.) At Safeway, 20 of the generics were on sale; 10 were on sale at Fred Meyer. I chose to list non-sale prices because it's impossible to know which items are on sale when.
Running the numbers
Second, generics are not always a bargain. On 10 out of the 25 items, the Safeway generic cost as much (or more!) than the name-brand equivalent at Fred Meyer. On the other hand, Fred Meyer store-brand items offer fantastic savings, especially when compared to Safeway's name-brand selections. (The items on this list were 44% less expensive!)
Another factor to consider is that some stores have a better selection of store brands than others. Subjectively speaking, Fred Meyer seemed to have about double the number of generic items that Safeway had — and often had multiple sizes or varieties. They carried several types of store brand salsa, for example, while Safeway's selection was more limited. At both stores, the generics were generally staple items: rice, toilet paper, tomato sauce, etc.
"We do buy generics," she said.
"We do? Like what?"
"…" she said (proving for once that Kris is not always right!).
Though Kris and I do a lot of things to save money, we don't actually buy a lot of store brands. We're not opposed to them — we just stick to brands we trust. This brand loyalty costs us money. Here's how Consumer Reports put it in the article that inspired my research: "Switching to store brands can be a painless way to cut your grocery bill." They're right.
After conducting this experiment, I realize there are four key steps to saving big bucks on groceries. More than anything else, these actions can help struggling families cut costs:
This exercise was eye-opening in another way. I discovered that shopping at Safeway costs us money. If the data here is representative, then switching to Fred Meyer could save us over 10% on our grocery bill.. That's enough to let us dine out one extra time per month. Or it's more money we can save for our trip to France next year.
Kris and I are both wary of switching from Safeway to Fred Meyer — as I mentioned, there's more to this decision than price — but I suspect that if we give it a chance, we'll find ways to deal with Fred Meyer's annoyances and save money in the process.
Posted: 14 Sep 2009 04:42 PM PDT
On this week's installment of The Personal Finance Hour, Jim and I spent the hour talking with nationally-syndicated financial columnist Greg Karp. Greg is the author of The 1-2-3 Money Plan, which I reviewed last week. We had a wide-ranging conversation about spending smart.
Karp notes that the goal of life is not to "live cheap and die loaded". Yes, you want to save for the future, but you should also allow yourself to enjoy today. Karp makes room in his budget for golf and good cigars. Now that I'm out of debt, I allow myself to spend more money on comic books.. It's fine to spend on yourself, as long as you keep your spending reasonable.
We also discussed the relationship between money and happiness. Karp recently interviewed Gretchen Rubin from The Happiness Project. Karp says he's learned that there are a number of ways you can "buy" happiness.. For example, you can spend your money on experiences rather than things. Material goods depreciate. The day after you buy them, they're worth less than what you paid. And they don't bring a lot of happiness. Experiences, on the other hand, tend to appreciate. Our memories of the things we do become fonder with time because we tend to focus on the positives rather than the negatives.
Our conversation covered several other topics as well, including:
During the show, Karp and I both ranted a bit. Karp complained about people who buy bottled water. (I confess that I'm guilty of this.) "This is stuff that falls from the sky for free," he said. And I ranted about the new Joan Rivers show How'd You Get So Rich?, which is lowest common denominator television at its worst. It's all about glitz and spending when it could have been so much more. (I'd like to see a Millionaire Next Door television show that profiles the rich and frugal.)
Be sure to join us next week when we speak with Michael Hampton from the Career Development Center at Western Oregon University. Hampton will be chatting with us about job hunting skills.
Note: Our guest last week was Flexo from Consumerism Commentary. Jim and I spoke with him about what it takes to make the leap from a secure job to working full-time for yourself. Though much of the conversation revolved around professional blogging, there's plenty here for people looking to make any sort of career change. Here's a detailed show summary.
The Personal Finance Hour
You can always find this show (and other episodes from the archive) by following this link, which will open in iTunes. Finally, please note that every week Brain from My Next Buck takes the time and effort to create detailed show summaries, which you can find at personalfinancehour.com.
|You are subscribed to email updates from Get Rich Slowly |
To stop receiving these emails, you may unsubscribe now.
|Email delivery powered by Google|
|Google Inc., 20 West Kinzie, Chicago IL USA 60610|