Singapore: No-frills house-brands to beat rising food prices

A growing no-frills revolution
Neo Chai Chin, Today Online 5 Feb 08;

IN Ms Julie Kee's household, buying no-frills bread, detergent and even fish balls is a start when it comes to trimming the grocery bill for her family of four.

The 51-year-old design drafter estimates that her family saves "a few dollars" on each trip to the supermarket by opting for some house-brand items. But were they to switch completely to house brands, she estimates that up to $50 could be saved each time — reducing their $150 weekly grocery bill by a third.

At a time when the price of food has risen 2.9 per cent (from 2006 to 2007) and overall inflation 4.4 per cent, more are turning to no-frills brands to cut costs.

As a result, supermarkets are seeing a spike in the sale of house-brand products, which range from bread to bottled water and tidbits to toilet rolls.

Giant Hypermarket, for example, saw an 18-per-cent increase last year. Cold Storage and Shop N Save reported a 10- to 20-per-cent increase in recent months, while NTUC FairPrice reported a "double-digit growth" in sales since it started offering a 5-per-cent discount on 500 house-brand items on Dec 19.

Consumers say they appreciate the value-for-money deals on house-brand items, which can be cheaper than their branded substitutes by 5 to 50 per cent, according to the supermarkets.

Administrator Karen Chua, who is in her 30s, said she opts for house brands when buying necessities like salt and rice. A 10kg pack of rice at Giant costs about $11 — 40 per cent less than a "branded" pack of Thai rice. "There's no compromise on quality," she added.

Making the switch to house-brand products could result in bigger savings for consumers. For example, a basket of 10 house-brand items from FairPrice, including cooking oil, canned tuna and instant noodles, would cost $23.02, "about 34-per-cent cheaper than a similar basket comprising national brands", according to a FairPrice spokesman.

Supermarkets say that due to increasing popularity, they have expanded their range of house-brand items over the years. From about 800 house-brand items in 2000, FairPrice now has over 2,000, and plans to "introduce another 3,000 items in the next five years", said the spokesperson. Giant launched about 25 new items under its Giant and Gino house brands in the last three months, bringing the total to about 950.

Even relative newcomer Sheng Siong supermarket is growing its range of house-brand items under four brands — for example, Royal Golden Grain for rice and Softess for toilet rolls. "This segment is in its early stage of development for us," said a Sheng Siong spokesman.

And consumers, it seems, will make the switch if the price difference between no-frills and branded goods is great enough, and if the difference in quality in negligible.

"If the difference is 10 or 20 cents, I won't bother. The product also has to suit me," said Ms Kee.


House brands are flying off the shelves
Jessica Lim, Straits Times 5 Feb 08;

Supermarts report double-digit sales growth for cheaper, no-frills products

THEY come in plain vanilla packaging, have literally no other frills, and are mostly stacked below eye level on supermarket shelves.

But house-brand items are catching on with cost-conscious shoppers in a big way.

With prices of many food items rising, sales of house-brand items at supermarket chains - Giant and Cold Storage - rose by between 10 and 20 per cent last year, compared with 2006.

At supermarkets like Carrefour and FairPrice, the story is the same: Double-digit growth.

The common items picked up? Bread, rice, toilet rolls and kitchen towels.

Business is so good that other markets are jumping on the bandwagon.

Budget supermarket chain Sheng Siong, for instance, began stocking its shelves with house-brand versions of ice, detergent, toilet rolls and even abalone in the second half of last year.

Many stores - ranging from Watson's to Shop N Save - have had house-brand versions for items ranging from wet tissues to the painkiller paracetamol for some time.

But sales are taking off now, because rising inflation - Singapore's inflation rate hit a 25-year high of 4.4 per cent in December - and the higher cost of raw materials and production have pushed prices of everyday items ever higher.

House brands came under the spotlight again on Sunday, when Prime Minister Lee Hsien Loong addressed the issue of the rising cost of living here and said Singaporeans should 'go for cheaper house brands' to save money.

He added that there is 'no need to buy branded bread' as 'bread is bread, rice is rice'.

Mr Lee used the house brand example to make the point that Singaporeans can overcome the problem by working together; the Government would do its part to help - through the Budget, for instance - but people would also have to make adjustments.

Buying house brands could lead to big savings. On average, such items are about 15 per cent cheaper than others, but the difference can be as much as 50 per cent.

Generally, savings on essentials are smaller. Rice, for example, is $1.50 cheaper for a 5kg bag than a comparative brand.

But on items like mineral water and dental floss, savings are greater: A six-pack of mineral water by Carrefour costs $7.90, compared to $12.50 for a brand-name product, while dental floss by Guardian Pharmacy costs $3.50 compared to $5.50 for the branded version.

There is added good news for shoppers on a tight budget, too: More such products are on the way.

Giant Hypermarket - which has about 1,000 types of house-brand products - launched 25 new ones over the past three months. And to meet increasing consumer demand, FairPrice aims to introduce another 3,000 house-brand items in the next five years.

It currently has more than 2,000 products under its house brand.

So why are these products cheaper?

A spokesman for FairPrice said costs are cut because products are sourced from all over the world and bought direct from the source to 'cut down on middle-men handling'.

He added: 'We then pass the cost savings to customers. Bulk purchase has also helped FairPrice to achieve lower prices.'

He added that low prices do not mean low quality.

Though most customers The Straits Times spoke to are sold, some, like Madam Jenny Lee, 44, are not.

She said: 'House brands may be cheaper, but when it comes to products like bread and oil, I stick to other brands. The quality is better.'

That, according to brand consultant Iskandar Muhd, 32, who advises companies on how to market their products, is a fallacy.

He said that 75 per cent of the time, 'people look at items from a branding point of view instead of quality of the workmanship'.

He added: 'Sometimes house-brand items and other branded items are exactly the same.'

Go for house brands, save $600
Jessica Lim, Straits Times 5 Feb 08;

FOR five years now, Mr Augustine Chua, 56, has been filling his supermarket trolley with NTUC FairPrice's house brand of products.

Each fortnight, Mr Chua hits the FairPrice supermarket at AMK Hub, a 15-minute walk from his three-room rental flat in the same neighbourhood.

And where there is a choice, his is simple: Go for the house brand. Doing so saves him about $600 a year, said the production manager, who earns $1,500 a month, and spends about $30 a fortnight on groceries.

'The house-brand items are priced reasonably and are good quality. Saving $600 a year on groceries is a lot for me,' added Mr Chua, who is separated from his wife and has no children.

Yesterday morning, he offered The Straits Times a peek into his shopping trolley, and about half the items in it carried the FairPrice brand. Among them: A 1kg bag of sugar, a packet of pork balls and a tin of mixed nuts. His savings range from 15 cents for a packet of vegetables to almost $2 for a pack of fish balls.

Mr Chua does treat himself to slightly more expensive brands for items such as chilli sauce, and pineapple slices.

But he added: 'House brands are good. When it comes to items like vegetables and nuts, I cannot tell the difference between a house brand and a non-house brand.

'Both are just as fresh!'