Kroger Sees Private Label Dollar, Volume Sales Rise in Third Quarter

December 6, 2011
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Kroger’s private label sales rose to 27 percent of grocery dollar sales and 35 percent on unit sales in its recently completed third quarter, compared with 26 percent of dollar sales and 34 percent of unit sales in the same quarter last year, executives for the Cincinnati-based supermarket giant told financial analysts in a Dec. 1 conference call.
The growth of private label sales outpaced that of national brands at Kroger stores in the quarter, company officials said. Overall tonnage of sales was flat.
“Customers are shifting what and how they are buying groceries and consumables. For example, we saw significant growth in sales in our corporate brand items. Some customers are buying smaller pack sizes for items in certain categories,” W. Rodney McMullen, Kroger’s president and chief operating officer, said during the call.
“Considering the consistent share growth of Kroger's corporate brand products for several years, it is obvious that once customers try them for the first time, they continue to choose them for their great value, both in terms of quality and low price points,” he said.
“Our corporate brand team continues to develop innovative product lines to address unmet customer needs. During the quarter, we launched some great new products for customers looking to change their eating habits, including a 99 percent natural, zero-calorie baking sweetener that measures cup for cup like sugar,” he said. Kroger also rolled out no-sugar-added pies in its bakery department during the quarter.

Kroger reported net earnings for the quarter of $195.9 million, compared to earnings in the same period last year of $202.2 million. Total sales, including fuel, increased 10.3 percent to $20.6 billion in the third quarter of fiscal 2011 compared with $18.7 billion for the same period last year. In the third quarter, which ended Nov. 5, total sales, excluding fuel, increased 5.1 percent over the same period last year.

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