Kroger’s private brands division had its “best year ever in 2020,” exceeding $26.2 billion in sales last year, and Simple Truth surpassed $3 billion in annual sales for the first time.
The milestone numbers were presented during Kroger’s fourth-quarter call by Rodney McMullen, chairman and CEO of Kroger. For the quarter ended Jan. 30, Simple Truth grew 18% in sales, as he said healthy eating was a bright spot across the company’s numbers. He said the plant-based arm of Simple Truth is also continuing to grow in trial rates and strengthening in repeat rates.
Last year, the retailer launched 53 new items under the Simple Truth plant-based line. A spotlight of the category was Simple Truth Oatmilk Ice Cream, which McMullen said brought new consumers to the category. In 2020, 1.4 million households bought a plant-based Simple Truth product, he said.
With more cooking at home, premium products are of note as well, marked by a 20% increase in sales for Kroger’s Private Selection brand, while its meal service Home Chef had record sales. Deli and ready-to-heat foods also had a strong fourth quarter.
As its own brands grow, digital also continues to thrive at Kroger, driven in part by Kroger’s data and personalization capabilities, according to McMullen during the call. For example, throughout 2020, Kroger had 1.3 billion customer interactions throughout its digital modalities, up 30% compared to the year before, he said. The company also presented nearly 11 million personalized recommendations per week during 2020.
For Q4, digital sales grew by 118% over the prior-year period, fueling year-over-year same-store sales growth of 10.6%. Total company sales during the quarter totaled $30.7 billion and increased 10.7% without factoring in fuel and dispositions, and the full year identical sales increased 14.1%. Total sales rose to a record $132.5 billion from $122.3 the prior year, making for a 14.2% gain, excluding fuel and dispositions.
"Kroger continued to grow market share during the quarter. Our ability to meet our customers' evolving needs is a testament to our deep competitive moats, disciplined investments in our increasingly robust digital capabilities, as well as our associates' relentless focus on our customers,” McMullen said. “We finished fiscal year 2020 with strong sales and earnings, as heightened demand for fresh, convenient food and meal solutions across modalities, including in-store, pick up and home delivery, continued throughout the fourth quarter.”
Other highlights from the call included Kroger’s expandsion of pickup locations to 2,223 stores and delivery to 2,472 stores, covering 98% of Kroger households. The company, through Kroger Health, also administered more than 665,000 COVID-19 vaccines as of February 28th to eligible populations and was selected to be part of the Biden administration's Federal Retail Pharmacy Program.
Lastly, the retailer celebrated the first anniversary of its new logo design and Fresh for Everyone campaign.