More than 600 New Private Label Products at Kroger This Year

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September 28, 2010

Kroger attributes a good portion of its sales and earnings momentum to its private label program success and increased loyalty among their best and most frequent shoppers, executive told securities analysts during an earnings call to review second quarter results.

The grocer introduced more than 600 new store brand products this past year, with its Wholesome @ Home line and several prepared foods launched in the second quarter, according to Rodney McMullen, Kroger’s president, noting that new refrigerated salads, such as the BLT Pasta, and other side dishes complement the chain’s well received rotisserie and fried chicken programs.

“Our corporate brands are a key competitive advantage for Kroger. Our exclusive preferred brands help strengthen customers loyalty, because of their quality, price advantage and breadth of offerings, and they can only be found at Kroger,” McMullen said. Kroger’s corporate brand team has created a best-in-class program that is difficult for competitors to emulate. We continue to introduce new items based on what our customers tell us they want.”

Kroger partnered with one of its large national brand vendors to develop the new salad recipes “through a customer-driven process,” McMullen said, which started with customers selecting their favorite salad ideas and then providing input as prototypes were developed “and gaining their approval in the final product.”

Kroger tallied second quarter net earnings of $261.6 million, up $7.2 million, or a 2.8 percent rise, from $254.4 million it earned in the same period last year.

“Customer acceptance of all three tiers of our corporate brands portfolio continue to be strong,” McMullen said. “In the grocery department, corporate brands units, excluding milk, were up slightly for the quarter compared to the prior year. Recall that this is on top of double-digit growth this time last year.”

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