Since Kroger launched its Smart Way private label assortment in the second quarter, the products have found their way into millions of households, the grocer’s Chairman and CEO Rodney McMullen said during the company’s third quarter earnings conference call.
“These products are meeting the needs of our customers on a budget, and we've already seen 2 million households purchase Smart Way products,” he said. “Our customers are looking for opportunities to save on the products they love and our loyalty programs and personalized promotions allow them to do just that.”
Responding to on-going strong demand for private label products, Kroger continues to expand and diversify its Our Brands portfolio across all price points. The company followed its Q2 launch of Smart Way by adding a host of new items in the third quarter. McMullen said the line will grow further in the weeks ahead as a new items are in the pipeline
The third quarter saw consumers continuing to choose products from Kroger’s Our Brands private label mix, with sales of store-branded items up 10.4%. McMullen said more shoppers are turning to private label products in an effort to stretch their food budgets without compromising quality.
With its Kroger and Private Selection brands leading the charge, McMullen also reported a jump in sales of private label pet products. “We saw tremendous growth in our pet food brands as families continue to treat their dogs and cats,” he said.
McMullen noted that history shows a high level of stickiness when shoppers shift to buying products from Kroger’s Our Brand assortment because of the items’ quality and high satisfaction rates.
“What we find is even when things normalize, Our Brands come out of that at a higher penetration level than going in, which is good for our business,” he said.