CLARKONOMICS: After embracing store brands during the Great Recession, Americans are now starting to succumb to the marketing allure of brand names again.
Barron’s magazine reports sales of generics are declining as a percent of purchasing that people make. We spend about 16 percent of every dollar on generics, while the other 84 percent goes to brand name purchases. Other developed countries around the world spend up to 40 percent of their budgets on brand names.
We agree to voluntarily tax ourselves when we buy brand names. Buying a brand name is usually an emotional decision, unless you have tried the store brand and found it to be lacking.
If you’re one of those people who is afraid to try a store brand, know that store brands improved dramatically well before the recession set in.
Kroger does multiple grades on store brands in many categories. There’s a rot gut cheap choice, a mid grade option and a superior selection in some categories. The idea is that the superior selection should be better than brand name.
Consumer Reports, which had never tested store brands, has even started doing so lately. In fact, many store brands came in at or near the top of their rankings in many categories.
The return to name brands we’re now seeing really speaks to the power of advertising. We believe the brand name will somehow improve our life, taste better, be a treat, etc. The better treat, though, is to have more money in your pocket by buying generics over the brand name.