During its third quarter, Kroger launched more than 250 new store brand items, the most ever for one quarter by the grocer, including 50 new plant-based items under its Simple Truth brand. The launches helped grow overall market share and sales of its Our Brands products, approximately an 8.6% sales increase in total private brands for the quarter ended Nov. 7.
Kroger’s Private Selection brand was the leader in the quarter, generating a 17% rise in sales, compared with a year ago, and Simple Truth saw a 15% year-over-year sales bump.
Rodney McMullen, Kroger’s CEO, said Kroger’s Our Brands is a differentiator for the grocer as it works to be at the forefront of innovation with its brands. He said the continued pandemic shopping behaviors of cooking more at home, buying more online, and visiting stores less but buying bigger stock-up baskets is leading its shoppers toward its store brands.
McMullen said Kroger aimed to give shoppers more premium products to fill this cooking-at-home need, offering larger pack sizes of fruits and fresh foods during the quarter, and Kroger saw considerable growth in its Home Chef meal kits that are sold by delivery and in-store, as well as Simple Truth prepared foods such as its soups.
McMullen said during Kroger’s quarterly call that its Our Brands were a major cog in the company’s success for the quarter, along with its ability to offer personalized offers to shoppers and its seamless e-commerce operations.
In total, the retailer saw same-store sales without fuel increase nearly 11% for the quarter. Digital sales rocketed to a 108% increase, year over year, for the quarter. The operating profit for the quarter was $792 million and adjusted FIFO Operating Profit was $871 million — up 33% compared with the prior year.
McMullen said during the call that Kroger’s data and personalization abilities have a hand in more than 95% of a consumer’s web or mobile interactions and doubles the likelihood of a shopper adding an item to its online basket. He said for email engagement, the company’s personalized and relevant offers drive open rates that are 18% higher than the industry average.
He also mentioned its continuing partnership with Ocado is an example of steps the retailer continues to take to provide a seamless e-commerce experience.