Making the switch from branded products to a store's home brand alternatives could save shoppers thousands of dollars each year at checkout, according to a financial comparison website.
New analysis from Compare the Market indicates Australians are spending around $200 each week on average at the supermarket, but could save approximately $80 on these transactions.
By comparing the costs of 20 staple items at two major supermarkets, it found people could save $4,212 annually thanks to the price gap between more expensive products and cheaper home brand items.
What were the biggest price differences?
Compare the Market estimates Australians are spending around $198.16 on their weekly shop, equivalent to $858.69 each month and $10,304.32 annually.
Compare the Market spokesman Phillip Portman told SBS News people could potentially cut their spending in half if they buy home brand products, which were on average 49 per cent cheaper than their brand-name counterparts.
"The brand-name trolley of items like bread, milk, eggs, and cheese came in at around $164, but the home-brand trolley came in at about $83. So, a huge saving and probably a lot bigger than what we were expecting," he said.
Switching to home brand products could save you $23 on a 4kg pack of laundry powder, $9.50 on 200g of instant coffee, $7.20 on a one-litre body wash, $6 on a 500ml mouthwash, and $5 on a 750ml multipurpose cleaning spray.
In its August survey, Compare the Market found people could save $4,212 annually by taking advantage of the price gap between more expensive products and cheaper home brand items. Source: SBS News
The only thing you might miss is a range of options. A home brand pasta sauce might just have only tomatoes in it, Browne said, while a branded version could include basil, garlic, or other flavours.
Sometimes, price differences also come down to extras — like whether your tinned tomatoes have a ring-pull lid or not, she said.
Which types of products were cheaper?
Portman said the biggest price differences are in the toiletries aisle.
"If you give yourself a bit of wiggle room around things like shower gels or mouthwash, that's where we stand to see the biggest savings. It's also those cleaning items that tend to come with a bigger price difference," he said.
"Things like sponges, cleaning wipes, floor cleaner, they all come with a big saving if you are willing to switch."
The smallest savings were made on home-brand food items.
You could save around 30 cents on frozen peas, 50 cents on butter, and 75 cents on yoghurt.
Why are home brand products cheaper?
Sarah Megginson, media spokesperson at financial comparison site Finder, previously told SBS News there are a few reasons why home brand products cost less than branded ones.
These include reduced packaging costs, fewer or no margins for intermediaries in the supply chain, and sometimes lower ingredient or formulation costs.
But the biggest factor? Minimal marketing spend.
"Brands not only invest huge dollars in brand development and marketing campaigns for their products out in the world, but they also spend a small fortune with Woolworths to secure 'shelf space' in the prized eye-level shelves or end of aisles," she said.
"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."
For supermarkets, home brand products can be more than a budget-friendly option for shoppers — they're also a profit booster.
"Supermarkets love home brands because they own those brands," Browne said.
"We've seen a huge shift in the way our supermarkets in Australia retail. Ten or 12 years ago, there were a lot more name brands. Now we've seen a huge shift to more and more supermarket-owned brands, and that is purely for profit."
Other ways to save
Portman said there are several other ways to save on your grocery bill if you plan ahead of your shopping.
"Try to plan meals around what items are going to be on special. It could also mean splitting your shop between multiple stores and not just staying loyal to the one store," he said.
"We always encourage people to vote with their wallets."
He also suggested looking past the overall cost of a product and checking the unit price.
"That gives you a bit of a better understanding of whether it's better to buy a smaller quantity, or whether buying in bulk is going to save you more money."
— With additional reporting by Alexandra Koster.
