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Kroger To Discuss Nonfood Corporate Brands In 2013

March 8, 2013
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Kroger reported this week that sales in 2012 rose 4 percent, excluding fuel, from a year earlier, adjusting for an extra week in the 2012 calendar. The company also said that it would begin talking about corporate brand share in non-grocery items this year.

The reining PLBuyer Retailer of the Year is the second-largest private label grocery retailer in North America, according to the PLB Top 35. The company said its corporate brand dollar share in grocery was 27 percent in the fourth quarter, while unit share reached 33.5 percent.

Kroger President Rodney McMullen told analysts that the retailer added 588 corporate brand items in the grocery department in 2012, many under the Simple Truth and Simple Truth Organic lines that were launched in the summer.

And then McMullen said that Kroger was preparing to discuss its work with its corporate brands in the non-grocery departments.

“Our practice has been to disclose our corporate brands’ share in grocery category only,” he told analysts, according to transcripts from Seeking Alpha. “The reason for not using a broader base was the introduction of new items in categories where we previously had not been broadly represented. We felt this would have portrayed our growth in a too-favorable light. With this behind us, we plan to begin giving a view of our share across a broader portion of the store in future quarters.”

That means areas where Kroger has been working in private label outside of grocery – its Comforts for Baby line, Pet Pride, housewares and more – could get a spotlight as early as June, when the retailer would be expected to announce fiscal first quarter earnings for 2013.

In all, Kroger posted sales of $96.8 billion in 2012, with $25.849 billion in private label sales. That’s up from $24.401 billion in 2011 and moves the retailer closer to Walmart at the top of the PLB Top 35.

Walmart reported 2012 U.S. sales of $274.49 billion, and using the same calculations for private label shares as in 2011, that projects to $32.609 billion in private label sales.

In 2011, Kroger was $6.98 billion behind Walmart. Early projections are that gap closed in 2012 to about $6.7 billion.

“We plan to continue developing innovative products that solve for unmet needs and that our customers won’t find anywhere else in 2013,” McMullen said, according to the Seeking Alpha transcripts.

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