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The HSH Blog

Mortgage & Housing Market News from HSH.com
February 24th, 2009

Do you shop generically?



By which I mean: are you one of those shoppers who always buys a specific brand of groceries, regardless of price? Or do you seek out the better deal, regardless of brand?

Brand loyalty has been a mainstay of manufacturers for decades; it’s why they advertise, and keep on advertising. And it works; I can’t count how often I’ve seen shoppers swoop down the supermarket aisle, snatch up Bounty paper towels or Wonder bread (shudder), and ignore all the other brands — even those at half the price. (They’ve been well trained.)

But in these tough economic times, ‘private label’ merchandise is challenging that behavior:

Package-goods brands face their greatest crisis and strongest threat from private label since at least the early 1990s. And that’s the good news.

[Retail industry watchers] predict a structural slowdown in consumer spending that could last four to 10 years, which, combined with increasingly marketing-savvy and aggressive retailers, could conspire to push private-label shares to a dizzying high…

All in all, private-label market shares grew 0.8 percentage points to 21.9% of volume and 0.7 points to 17.1% of dollars in all package-goods categories and retail channels last year including Walmart, according to Information Resources Inc.

We’ve seen this before during the recessions of the late 1980s and early 1990s — but those were relatively mild recessions, and after they ended, most folks reverted to their habitual shopping habits. But this time around, with no clear end to to the recession, manufacturers fear it could be worse:

“There is no previous period that exactly parallels where we are today,” said Mr. Blischok, who believes consumer spending could remain weak for four to eight years and lead to a “downturn generation” that learns to scrimp and save permanently, including buying more private label. …

“We’re starting to train consumers that the deal price is the only price,” Mr. Blischok said. “We’re pumping out the morphine of deal, deal, deal. And we need to be talking value.”

Value is the operative word. It’s something that many of our parents understood, along with quaint notions like frugality and saving money. It’s something that a lot of people are learning, perhaps for the first time.

Exit anecdote: Sam’s Club (one of the many stores I frequent) was selling a t-shirt with a slogan that hasn’t been used much since the 1940s:

Use it up, wear it out
Make it do, or do without.

I kid you not.

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2 Responses to “Do you shop generically?”

  1. Mitch Says: February 28th, 2009 at 6:49 pm

    I have to say that I’m sticking with my brands for now, and probably forever. It’s the spoiled, only child thing; I have to have food that tastes like I want it to taste, otherwise I’m not eating it. Good thing there are no brand names on eggs.

  2. Need to Save Money on Groceries Fast? | family life Says: March 10th, 2009 at 6:07 am

    [...] Do you shop generically? (hsh.com) [...]

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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