INDIANAPOLIS — Times have been increasingly tough lately. Inflating costs from gas to groceries has families scrambling for ways to cut costs without cutting corners.
When your dollar doesn’t seem to stretch quite as far as it used to, the check-out at your local grocery store can be a scary place.
“When people are looking at the price I think, especially these days, that becomes a deciding factor,” Kroger spokesperson Eric Halvorson said.
According to a report from Credit Donkey, 97% of people are taking advantage of coupons, sales, or bargains of some kind while shopping. Halvorson says Kroger customers have downloaded 750,000,000 digital coupons in the last year alone.
“We know there are people struggling so our adjustment in prices, our ability to control prices, the availability of our coupons and deals helps more people,” Halvorson said. “In our case, I think a lot of it comes down to the size of Kroger when we are able to, in a sense, we’re buying in bulk.”
More often than not, Kroger, and other large grocery store chains like it will place their look-alike store products right next to the larger, more recognizable competition product. Director of the Center for Education and Research in Retail at the Kelley School of Business John Talbott called this tactic reference pricing.
“We use that term in marketing and so, this is your reference that tells you that that’s a good deal, and the only way you know it is because that’s sitting there next to the brand you know and trust,” Talbott said. “The quality’s the same. You can be assured that there’s no food issues or things like that because they’re subject to the same scrutiny, but it is a way perhaps to save money.”
What drives the price down, in the case of store products versus their national brand counterparts, is their ability to cut costs through a lack of advertising.
“You’re not paying for advertising; you’re not having to do a number of other things so, consequently they can pass that value along to the consumers. So, they don’t really need to advertise that brand.” Talbott said, “They spend a lot of time and effort carefully comparing the taste of their products to those that they are trying to sell against. They work hard to make them have, really the same flavor.”
Saving money by buying store brand
CBS4 Reporter Justin Kollar and Photojournalist Tyler Teal purchased ingredients to make the familiar peanut butter and jelly sandwich and chips with both name-brand products like Bunny Bread, Jif, Smuckers and Ruffles potato chips and store brand imitations from Kroger.
These products were priced drastically different. The total for the Kroger brand ingredients cost $8.46, while the name brand counterparts ran $15.06.
| Kroger: | Name Brands: |
| KRO Cheddar Ripple Chips $2.79 | Ruffles Cheddar Chips $5.59 |
| KRO Honey Wheat Bread $1.99 | Bunny Honey Wheat Bread $2.99 |
| KRO Creamy Peanut Butter $1.69 | JIF Creamy Peanut Butter $2.99 |
| KRO Grape Jelly $1.99 | Smuckers Grape Jelly $3.49 |
| Total: $8.46 | Total: $15.06 |
Many of the products are packaged the same and even look nearly identical out of the box – but do they taste similar?
The CBS4 crew took their assembled sandwiches to Monument Circle in downtown Indianapolis; testing three groups of FFA students and their families from Utah, South Dakota and Ohio to see if anyone could tell the difference between the products.
Some thought they could distinguish quality differences through peanut butter thickness, others through jelly consistency. Others still thought the softness of the bread and the distribution of flavoring on the chips were dead giveaways.
Whether going with their senses or their guts, after testing 17 different people, not one guessed correctly when asked which sandwich and chips came from the store and which was from the national brand. Talbott said that isn’t all that shocking.
“It just goes to show you, that we may perceive that we have that expertise around palette but, context matters, packaging matters, and all of that could change how you perceive the taste of something,” Talbott said.
Pricing out Thanksgiving items
The CBS4 team took their test a step further, assembling a mock grocery list that included essential items and several Thanksgiving staples, not tested for flavor, including stuffing, cranberry sauce, green beans and more.
| Kroger: | Name Brands: |
| KRO White Bread $1.99 | Sunbeam White Bread $2.29 |
| KRO Raisin Bran $1.99 | Kelloggs Raisin Bran $4.79 |
| KRO Fried Onions $2.69 | French’s Fried Onions $5.29 |
| KRO Cheddar Chips $1.89 | Ruffles Cheddar Chips $5.59 |
| KRO Butter $4.99 | Land O Lakes Butter $5.99 |
| KRO Marmalade $3.29 | Smuckers Marmalade $4.79 |
| KRO Stuffing Mix $1.50 | Stovetop Stuffing Mix $3.29 |
| KRO Canned Green Beans $.89 | Del Monte Canned Green Beans $1.50 |
| KRO Ground Coffee $7.99 | Folgers Ground Coffee $11.49 |
| KRO Grape Jelly $1.99 | Smuckers Grape Jelly $3.29 |
| KRO Canned Corn $.89 | Del Monte Canned Corn $1.50 |
| KRO Canned Pears $1.50 | Del Monte Canned Pears $2.39 |
| KRO Creamy Peanut Butter $1.69 | JIF Creamy Peanut Butter $2.99 |
| KRO Canned Tuna $.89 | StarKist Canned Tuna $1.29 |
| KRO Chocolate Chip Cookies $2.49 | Chips Ahoy Chocolate Chip Cookies $4.99 |
| KRO Cranberry Sauce $2.39 | Ocean Spray Cranberry Sauce $2.29 |
| Total: $39.06 | Total: $63.76 |
The comparison in price, without using coupons or even the Kroger Card shocked Halvorson.
“I was surprised because we always say you can save money, but I hadn’t sat down to do the actual comparison and I was really stunned by the amount of money that you can save by going Kroger Brand vs. national brand,” Halvorson remarked.
And with Thanksgiving fast approaching with the gift-giving season on its heels, every dollar counts.
“Food is part of the celebration so anything we can do to help people have a great celebration is important to us,” Halvorson said. “Nothing beats helping people save money so they can have a warm, nutritious meal that makes everyone happy especially when we know there are people struggling so, our adjustment in prices, our ability to control prices, helps more people have a special holiday.”
