KROGER GUARANTEES PRIVATE-LABEL LINES

RICHARD TURCSIK

ATLANTA -- Kroger Co.'s Atlanta division believes its private-label products are as good as any national brand's, and is making consumers an unusual offer to prove it.

The chain has instituted a private satisfaction guarantee program, called the "Kroger Brand Promise," which urges consumers to try Kroger's private-label products; if they don't like a product, they can get the comparable national brand for free.

The campaign began in March and is being promoted through half-page ads in local newspapers, coupled with heavy in-store merchandising. The ads are running in addition to the chain's usual newspaper advertising.

One recent ad used the headline "Kroger makes homemade spaghetti as quick as going out," and featured all the fixings to make an Italian dinner, including olive oil, spaghetti sauce, pasta, salad dressing and garlic bread spread.

Another ad in the same edition of the newspaper compared Kroger Select Blend coffee to Maxwell House, and featured two ceramic mugs -- one with the Maxwell House logo and one with Kroger's. A 34.5-ounce can of Kroger coffee was advertised at $2.99.

Officials at Kroger could not be reached for comment, but local observers told SN the campaign has been intense and appears to be drawing customers.

"Kroger has a whole point-of-sale program behind it. They are pushing private label pretty hard. They have been spending a disproportionate amount of their money on newspaper advertising for private label," said one observer.

"Kroger's private-label sales are excellent. They have a tag program in the store, where they use compare-and-save shelf tags and merchandise their private label next to the national brands,

like a lot of other chains," he said.

"If the vendors have a like item, similar to a Kroger brand product, then Kroger wants their product to be merchandised right next to the national brand. They have done that in all of their stores and they are promoting it very heavily throughout the stores," said another observer here.

"The campaign has been real strong. They are pushing it real hard and it is doing very well," he added.

Ed Comeau, a securities analyst with Lehman Bros., New York, said, "Kroger has a fairly strong commitment to sustaining a very good private-label business, more so than most chains. Kroger is trying to elevate the customer perception of the quality of their private label to that of the brands."