From Yahoo Finance · · 1m
Kroger's private label shift challenges brand loyalty
Kroger's private label strategy targets your childhood brands with value-driven alternatives
In brief
Kroger's private label strategy targets your childhood brands with value-driven alternatives Kroger's private labels now outperform national brands in key categories while maintaining quality Originally reported by Yahoo Finance.
Private label dilemma
Consumers mix feelings about private label brands, buying Kirkland for medicine but wary of food products
“I'll buy Costco's Kirkland brand for over-the-counter medicine but am wary about using private labels for food”
Consumer preferences shift
68% of Americans see private labels as better alternatives to national brands with 69% believing they offer good value
“58% of consumers don't care whether a product is national or private label, they simply buy what they need”
Kroger's private label growth
Kroger's private label sales increased $420 million in produce, meat, seafood, and prepared foods over the last year
“Private selection sales increased more than 14% during the quarter, driven by strong customer response to new products”
Kroger's strategy
Kroger CEO Greg Foran says private labels deliver value without compromising quality, with 50 basis points higher penetration
“Customers are looking for value but not willing to compromise on quality. Our brands answer both”
Costco's Kirkland model
Costco's Kirkland Signature brand accounts for $86 billion in annual sales, representing a third of Costco's total revenue
“Around six hundred products globally carry the Kirkland Signature label in categories ranging from batteries to pet food”
Private label market growth
US private label sales reached $330 billion with 24% unit share and 23% dollar share of the market
“Private label sales reached three hundred thirty billion dollars capturing twenty-four percent unit share and twenty-three percent dollar share”
The bottom line
Kroger's private labels now outperform national brands in key categories while maintaining quality
