Albertsons Pushes Private Label Expansion, Targets 30% Penetration
As grocery shoppers continue to seek products that offer strong value, Albertsons is working to meet this need by expanding its assortment of private-label products.
During the company's recent investor conference call to discuss first-quarter results, company officials said the penetration rate of its store brand products, which now sits at 25.7%, has the opportunity to grow to 30% or more.
"We're proud of our own brands program, but we're not satisfied with the penetration that we have," said Sharon McCollam, president and chief financial officer with Albertsons. "So we're really leaning in for Q2 and the rest of the year."
During the first quarter, Albertsons expanded its Overjoyed own brand assortment and debuted its Chef's Counter brand, which is touted by the grocer as offering chef-inspired flavors and tastes to shoppers in a convenient, easy, and affordable way. To boost the visibility of the new line, Albertsons has enlisted celebrity chef Antonia Lofaso to serve as brand ambassador.
To celebrate the launch of Chef's Counter, the grocer held an event in Hollywood hosted by Lofaso and featured several dishes from the new line.
"This event was more than just a launch; it was a celebration of culinary creativity and innovation," Albertsons wrote in a blog post. "With adventurous flavors and globally inspired ingredients, Chef's Counter offers shoppers restaurant-quality recipes and new mealtime possibilities, all with the convenience, ease, and value of cooking at home. The brand is debuting with a flavorful selection of ready-to-cook marinated meats, helping food lovers turn their culinary inspirations into reality."
Chef's Counter launched after the September 2024 debut of Overjoyed, Albertsons' first major private-label debut in nearly a decade. The initial assortment of 150 items focused on various treats, including cupcakes, cookies, and cakes. The grocer earlier this year teamed with actress Tia Mowry on a digital marketing campaign for the own brand.
The grocer's expanding private-label assortment may also serve as a solution to help offset any price increases as a result of tariffs being imposed by the Trump administration. McCollam said that as Albertsons watches tariffs, there could come a point where expansion of its own brand assortment is a solution to offsetting any tariff-related price hikes.
In its fiscal year first quarter, companywide sales totaled $24.9 billion, up 2.5% from the comparable quarter the previous year. Adjusted net income for the quarter was $318.9 million, or $0.55 per share, down from a net income of $391.6 million, or $0.66 per share, during the first quarter of fiscal 2024. Identical sales were up 2.8%, and digital sales increased 25%.
