Kroger grows private brands 3.1% in second quarter

Kroger's Rodney McMullen said private brands continue to bolster business.

The Kroger Co. continues to build on its Our Brands, the Cincinnati-based grocer's private label portfolio.

During the second quarter, Kroger’s Our Brands sales grew 3.1%. Retail and unit share growth led to the highest second quarter share in Our Brands history. Kroger also introduced 203 new Our Brands items during the second quarter.

“Our customers’ favorite new items mirror key food and flavor trends we predicted,” said Kroger Chairman CEO Rodney McMullen Thursday when the retailer announced its second quarter earnings. "And those new items delivered more than $137 million in incremental sales during the second quarter, further bolstering our supermarket business.”

Overall, McMullen said the grocer’s second quarter results reflect the disciplined focus of the retailer’s three-year $900 million Restock Kroger blueprint announced in 2017. Kroger reported a 2.5% increase in same-store sales, excluding fuel, up from the corresponding period a year ago and beating estimates of 1.9% growth. These were the best same-store sales reported by Kroger since the start of Restock Kroger. 

During the second period, Kroger reported slightly higher sales of $28.2 billion compared to $28 billion a year earlier. Digital sales, a key focus for the company, grew 31%. Profit declined to $297 million, missing forecasts. The company primarily blamed lower margins in pharmacy.

For the period ended Aug. 17, Kroger earned 44 cents per share. That was up 7% from the 41 cents it earned in the year-ago quarter and it beat estimates by the same margin. Kroger reiterated its full-year guidance of same-store sales growth of 2% to 2.25%.

“We continue to make significant investments to redefine the grocery customer experience,” McMullen said. “We are building a platform of seamless experiences to serve customers anything they want, anytime they want, and anywhere they want. We know the seamless experience is essential to the customer experience both today and tomorrow, which is why we continue to invest heavily in our capabilities in this area.”

Earlier this month, Kroger announced it's rolling out an extension of its popular Simple Truth private brand called Simple Truth Plant Based, which will include fresh meatless burger patties and grinds as well as plant-based cookie dough, pasta sauces, sausages, deli slices, dips and other items.