Australians are making more everyday home brand product shifts to save their families thousands in grocery savings. According to Finder’s new Consumer Spending Survey, 39 percent of Americans are switching to less expensive brands. They’re doing this to reduce financial burdens. This trend is compounded by increasing prices, as a recent poll found that 79% of households are concerned about being able to afford food and groceries. Yet a January survey by consumer advocacy group CHOICE uncovered an alarming disparity. Eighty-four percent of households report stress over the rapidly climbing costs of groceries.
Still, experts say supermarkets are taking advantage of this transition. Kate Browne, head of research at Compare Club, explains that home brand products offer a range of benefits for retailers. “Supermarkets love home brands because they own those brands,” she said. This ownership allows grocery stores to reduce their expenses. They’re no longer tasked with juggling outside distributors and vendors, which often up costs on popular, name-brand goods.
Sarah Megginson, industry watchdog, outlines a few reasons why home brands are able to undercut the pricing of established brands. She focuses on the cost savings in packaging. Secondly, she points to the reduced margins for middlemen in the supply chain and sometimes lower ingredient or formulation costs. “Home brand products are obviously not investing in this — they’re happily sitting on the bottom shelves, out of the way of their more expensive counterparts,” Browne noted.
This increased aversion towards foreign brands has led to a substantial shift in consumer behavior. Browne emphasized that there has been a “real big shift over the last couple of decades around home brands.” Ten or twelve years ago, consumers were faced with a huge array of name brand options. Now, millions are swallowing pride and heading into supermarket-owned stores to save a dime at the checkout.
CHOICE has tested home brand products for many years and time and time again they outperformed the more expensive competition. According to CHOICE experts, “We’ve found this happens across a number of categories, including tea bags, coffee, ice cream, dishwasher detergent, toilet paper, and more.” Megginson adds that home brands are “almost always cheaper than brand names and when budgets get tight, they’re a great option if they do the job on a taste — or in the case of cleaning products, a performance — basis.”
While home brand products are often a good way to save money, quality can vary widely. Megginson cautions that “that doesn’t mean the product is always exactly the same as the ‘branded’ product; it just means it was made at the same factory.” In some cases, the differences are minimal, while in other cases, there are significant differences in flavor or potency.
The cost-of-living crisis and the resultant economic landscape has forced many Australians to be more agnostic with their brand preferences. Browne observes, “We’re seeing people being a lot more agnostic around brands. People are looking for the cheapest.” This trend has only been compounded by the increasing cost of living, including inflationary pressures on household budgets.
According to CHOICE, consumers will continue to move toward home brand products. They’re on the front lines, and they’re doing their best to find ways to cut costs. Browne warns of concerning trends: “We’re seeing a lot of shift in behaviour. Concerningly, we’re seeing people rely on buy-now-pay-later to buy groceries in some scenarios.” This increased dependence on credit options for basic, necessary purchases is a troubling symptom of the financial crisis many families are facing today.
