Kroger Has an Edge with Private Labels

By George Anderson, RetailWire

Kroger is a notch above most of its competitors when it comes to own brands. While private label represents about 20 percent of dollar share in all supermarkets, according to Nielsen, the number is 25.2 percent across Kroger’s businesses, excluding fuel and pharmacy.

Kroger has gone after the market on both the low and high ends. According to a Cincinnati Enquirer report, Kroger’s Simple Truth natural line is on its way to annual sales of $1 billion. Recently, the supermarket chain operator rolled out lower-priced private labels to attract cash-strapped shoppers.

Gil Phipps, Kroger’s vice president of corporate brands, told the Enquirer that the Great Recession spurred an expansion of the company’s private label offerings.

While price is important, product quality has ultimately been the reason for Kroger’s success, said Mr. Phipps. “We’re not offering knock-off versions. We want to be a knock-out,” he told the Enquirer.

Kroger’s recent acquisitions of Harris Teeter and Vitacost.com should only help the organization further expand its private label. Both Teeter and Vitacost are seen as a natural fit for the Simple Truth brand.

The company currently operates 37 food processing or manufacturing facilities responsible for producing about 40 percent of Kroger’s private label products.

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