Economy-conscious shoppers pick up store brands

Chicago Tribune (MCT) - On a recent grocery shopping outing, the chicken broth and applesauce in Julie Ernst's cart bore the Safeway label instead of familiar brand names such as Swanson or Mott's.

"Normally, I would have bought a name brand," she said, pushing her cart through an Elmhurst, Ill., Dominick's, a chain owned by Safeway. "But these are on sale _ and then there's the economy."

The economy _ a roiling caldron of evaporating jobs and soaring food prices _ has caused shoppers to migrate to cheaper store brands at rates not seen since the last recession in 2001, according to market researcher Nielsen Co. Back then, they shifted right back to name brands when the economy perked up.

But this time, the shift may be more permanent, potentially benefiting food retailers at the expense of packaged-food manufacturers, industry analysts say. Since the last recession, supermarket chains have poured millions into beefing up their private labels, launching new brands, improving packaging and bolstering quality.

"I do think we are in for some very fundamental long-term shifts for private label just because so many retailers are getting behind it," said Todd Hale, a senior vice president at Nielsen. "And, without question, consumers have a more positive attitude toward private label."

The upshot: When shoppers such as Ernst switch, they may be more likely to leave a name brand behind permanently. "I think if I don't see any difference, I'll stick with the store brand," she said.

Shoppers increasingly find little difference between name brands and store brands, which typically cost 25 percent less. A recent Nielsen survey found that 63 percent of consumers said the quality of most store brands is as good as that of name brands, up from 60 percent three years ago.

And a successful store brand can lure customers from one chain to another, experts said. Take Andriani Siavelis, who was shopping this week at the Elmhurst Dominick's. She has become partial to the O brand, which Safeway has put on more than 300 organic items, from fresh produce to cookies to frozen pizza.

Siavelis' cart carried several O items _ black beans, navy beans, eggs. The brand has changed her shopping behavior, she said, giving her less incentive to shop at chains that focus on organic. "Now I don't have to go to Whole Foods or Trader Joe's," she said.

___

© 2008, Chicago Tribune.