Next Avenue: If you’re buying name brands over generics, you could just be wasting money

by | Aug 21, 2023 | Stock Market

This article is reprinted by permission from Taco Tuesday may bring to mind Old El Paso shells or Pace salsa, and Wednesday might still register for many people as Prince spaghetti day. But if you buy private labels instead, you can enjoy the traditions and have more in your grocery budget at week’s end.

Surprisingly, even after prices jumped last year, consumers directed only about one quarter of their packaged food spending to less expensive private-label brands, says former grocery executive and “The Checkout” podcaster Errol Schweizer.Shopping for value So I went looking for data on value, quality and more and found five yummy reasons to buy the value brand. Let’s start with price: 1. Name brands’ private-label equivalents cost 40% less on average, according to CNET studies of Wegman’s, Stop & Shop and Trader Joe’s published in June — sometimes more, sometimes less. (This summer I found a 56% difference between General Mills’
brand-name Cheerios breakfast cereal and the Giant supermarket chain’s generic version. I also saw that Safeway’s private-label black beans cost 37% less than Goya brand beans.) An average family of four spends $15,674 a year on food at home, according to the USDA. Subtract spending on nonbranded items like produce and products that truly don’t have a generic equivalent; to make calculations easy, suppose that brings the total to $12,000. Read: What will happen with inflation, interest rates and housing? Here’s what to expect in the next two years, and what could go wrong.Grow your own savings Assuming the 40% savings holds true, that means our average family could save up to $4,800 (40% of $12,000) by switching from national brands to value brands over one year. Suppose you set aside one year’s $4,800 in savings and invest it in a growth portfolio of 70% stocks and 30% bonds. “Based on historical returns of about 9.05%, in 20 years that $4,800 could …

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