Kroger, Delhaize Seek to Harness Private Label Potential

JULIE GALLAGHER

CHICAGO — Confident that private labels have potential for growth beyond recessionary periods, Kroger Co. and Delhaize Group are experimenting with strategies aimed at maximizing share, said representatives from the companies at last week's Private Brand Movement conference here.

An employee-only contest designed to get associates at Delhaize banners behind its private-label brands is one such effort.

Exclusive to employees of Food Lion, Reid's, Bottom Dollar Food, Bloom and Harveys, the sweepstakes was designed to familiarize store employees with several tiers of private brands. Entries were tied to the number of store brands purchased with a loyalty card during a specified period, with My Essentials earning double rewards. Despite $100,000 worth of prizes, the plan fell short of targets, said Nancy Dumais, director of branding and design of private brands for Delhaize America.

“We found that getting our associates to engage is probably not unlike getting customers engaged,” Dumais said. “Though we had some success, we didn't get the level of participation we'd have liked. We need to spend time and money getting that group to really be ambassadors for our brand.”

Despite that setback, another Delhaize banner is putting more power in the hands of individual employees. Hannaford Bros. recently moved from managing a central Facebook page, as all other Delhaize banners do, to empowering a handful of stores to maintain their own.

“It's been pretty scary to let them go as a company,” Dumais said. “We're not sure if the model can be expanded but in either case we'll have lessons to take to the next phase of social media.”

Kroger is experimenting with a couple of forms of social media to promote store brands, but it continues to be a learning experience, Susan Sanderson, director of corporate brand management for Kroger, explained.

“From a sophistication perspective, and especially from our perspective, retailers are way behind the 8 ball and definitely not where we need to be,” she said. “But if we don't get in and play we'll be left behind.”

The chain has had positive results with Twitter parties and engaging mommy bloggers who've helped expand and promote its Comforts baby brand. But the chain has been somewhat limited by its technological infrastructure. Kroger's web platform is unable to support sites like comfortsforbaby.com, which was built externally to promote the corporate brand.