Kroger's Private Brands Seeing 'Remarkable' Success, Says CEO

Kroger CEO Rodney McMullen lauded the strides the retailer has made in regards to its private label offerings, specifically its Simple Truths brand, in a call with investors last week.

In 2017, the retailer reached $20.9 billion in total sales, and reached $2 billion in annual Simple Truth sales, which McMullen said is “remarkable considering the brand is only five years old.” Kroger has also partnered with Fair Trade USA, and now offers more Fair Trade Certified products than any other private label brand in the country.

McMullen said that for the fourth quarter, private label made up 29.5% of unit sales and 26% of sales dollars, excluding fuel and pharmacy—but it is “incredibly easy to take this success for granted.

“But I've seen the energy our teams have put into creating the right items, and it's really a big deal that an independent third-party research has validated the progress that we've made,” he said.

Kroger plans to “shout about” the private label offerings to customers who have yet to experience them, McMullen said. He said the retailer will be particularly focused on its top-selling brands, including Kroger private selection and Simple Truth.

“Our customers will be treated to an amazing array of enticing ... new brand product introductions throughout the year, an assortment that will add excitement and ... simplicity to their lives, all at amazing prices,” he said.

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The investor call also touched heavily upon Kroger's intention to improve wages and benefits for its workers. The retailer is evidently taking steps toward these goals with today's ratification of  a new contract with UFCW 75 for its Cincinnati and Dayton division associates. 

This was the first contract ratified under the Restock Kroger initiative, which promises to invest $500 million in associate wages, training and development over the next three years. 

"Kroger is a place where you can come for a job and stay for a career. A key driver of Restock Kroger is talent development, and we are committed to investing in our associates," said Tim Massa, group VP of human resources and labor relations. "It's only fitting that we begin our accelerated wage investments in Cincinnati, where Kroger was founded 135 years ago."