Bargain hunters

CINCINNATI — After watching the price of her favorite bread rising too quickly, Michele Shores decided it was time for a fresh approach. She began picking up store-brand breads, Kroger Co.’s namesake brand or Wal-Mart Stores Inc.’s Great Value, when her usual bread went from $2 to $3 a loaf. Less than half the price, and not half bad.

“My husband takes his lunch to work and we all eat a lot of sandwiches here,” said the 30-year-old mother of two from Atlanta. “So that’s a lot of money for us.”

As budgets get tighter and food gets more expensive, American shoppers are increasingly switching to store brands — even upper-income consumers who may not have been inclined to give them a try before.

The nation’s biggest grocery-sellers, Wal-Mart, Kroger, Supervalu Inc. and Safeway Inc., all report sales of their own brands are jumping, as customers can’t stop regularly buying food and household items but need to reduce spending.

“There are things we can do to drive less, but how do you eat less? You don’t,” said Erin Frehner, a Brigham Young University senior.

Frehner said she and her husband, both full-time students with part-time jobs, always try to get the store brand unless they strongly prefer the national brand or the price is almost the same.

The Food Marketing Institute, an industry trade group, found this year that the number of shoppers who say they are buying more store-brand items has been steadily rising, now up to some 60 percent. Candace Corlett, president of the consulting firm WSL Strategic Retail, says her group has found that even upper-income shoppers are more willing to buy store brands, which have traditionally been seen as appealing most to people on limited budgets.

That shift comes as the chains are offering more store-brand products of better quality.

Gone, for the most part, are the gray, no-frills cans with nondescript labels such as “peas,” packaging that evoked cheap, bland taste. Many now sport colorful labels with names like Kroger’s “Private Selection” and “Naturally Preferred” that don’t shout “store brand!”

The stores have been pushing their own brands in areas such as dairy products, meats and breads where prices have risen especially fast, and are tapping into increased demand for organics and natural foods.

“Store brands have come a long way,” said Tod Marks, a senior editor at Consumer Reports, which has tested store brands against national brands for quality and customer response. “Over the years, retailers realized that store brands were not just something to be floated out during hard times. … ‘This is a signature product of ours. We want to be known for this.’ ”

Stores generally reap better profit margins by selling their own brands — also called corporate brands, private labels or generics — and also use them to build customer loyalty.

Surveys have shown that most people were highly satisfied with most store brands, Marks said, and testing found many of them held their own against the national brands. In some cases, he said, consumers must decide whether “good enough” at a lower price is better than buying a national brand.

Safeway’s 2-year-old “O Organics” line has been so successful the company has licensed it for sale by other retailers.

Supervalu’s chief executive, Jeff Noddle, said this month that the Wild Harvest natural/organic line that hit shelves in April has been “our most successful product launch ever.”

Wal-Mart, which says sales of some private-label categories are up 40 percent this year, is rolling out new “All Natural” ice cream featuring such new flavors as blueberry pomegranate.

Kroger has new lines of steaks, bread and pizzas besides more organic items. Within the past five years, the company has nearly doubled to 14,000 the number of store-brand products it offers. It also gives free samples and runs blind taste tests against national brands in its stores, and has increased direct mailings to regular customers with coupons and recipe ideas for its brands.

Procter & Gamble Co., which has repeatedly raised prices to offset higher costs for energy and raw materials, has expressed confidence that product innovations and people’s loyalty to its generations-old brands such as Pampers, Tide detergent and Gillette shavers will keep sales growing.

“It’s all about value,” Clayton Daley Jr., P&G’s chief financial officer, recently told analysts. “It’s not just price, it’s all about product performance. … It’s about the trust that consumers have in your brands.”

Frehner, the BYU student, recently loaded up on 48 boxes of Kroger macaroni and cheese that was on sale, 92 cents per box cheaper than their favorite brand.

But she and her husband miss their Kraft mac-and-cheese.

“Many times we can’t tell the difference and we are glad there is a cheaper alternative,” she said. “Other times, we notice a difference and just deal with it because of the money we save.”