Safeway Private Label Grows Faster than National Brands

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October 18, 2011

Safeway stores are growing profits and store brands, as private label growth triples that of national brands.

“We continue to grow private label sales faster than national brands. Our private label sales are outpacing national brands by about three to one,” said Steve Burd, chairman, president and CEO during a third quarter conference call with analysts. “In a soft economy, that shouldn't be that surprising. But we think should the economy get better, we'll continue to outpace national brand growth.”

Safeway has been investing heavily in store brands, recently launching Open Nature, The Snack Artist, In-Kind personal care products and a variety of other offerings. "We continued to innovate throughout the business to meet our customers' needs and build their loyalty,” said Burd. “Our just for U digital marketing platform and our proprietary Open Nature line of 100 percent natural foods are good examples of these efforts."

Safeway launched the Open Nature line in January, beginning with the meat category and since then expanding it to bakery, dairy, deli, frozen and grocery. Other cornerstone store brands include O Organics, Eating Right and Safeway Select.

Private label growth is helping Safeway grow sales even as shoppers continue to be pressured by the economy. “I think that in this environment, you can do things to alter your mix and go for things that are more profitable, like private label,” Burd said. “So you're not without the ability to increase earnings. The economy is not going to get materially better.”

Total sales at Safeway for the third quarter were $10.1 billion, compared to $9.4 billion in the prior year, thanks in part to a 1.5 percent increase in same-store sales (excluding fuel).
“We wish our sales progress were much faster, but we love the fact that it's steady,” Burd said. “And so much of what we have been working on has really yet to play out in the marketplace.”

Read These Related Articles:

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• Kroger Sees Significant Store Brands Growth
• Kroger Store Brands Tally Double-Digit Sales Increases
• Store Brands Gain Share in Significant Categories
• Supervalu Grows on Private Label

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