ALBERTSON'S REFINES PRIVATE-LABEL SALAD STRATEGY

MINA WILLIAMS

BOISE (FNS) -- Market shifts have spurred Albertson's here to hone its own brand packaged salad line to two SKUs. This move makes way for nationally branded items on unit shelves and opens the door for the chain to take advantage of the synergy of its size following its merger with Lucky Stores.

The operator previously offered 10 SKUs of packaged salads under the chain's own Albertson's brand. Varieties in the packaged salad line ranged from traditional garden salad items to more exotic blends and salad kits, which came complete with dressings and toppings. Now the only package salads under the Albertson's brand are available in one- and two-pound sizes, and only in the garden salad variety.

"For the other varieties we are moving to national brands," said a source, familiar with the change. "The blends, kits and European varieties will all be offered to our customers, but under national brands."

When the operator initially introduced the line four years ago, packaged salads were positioned by the chain as a commodity, not as a value-added item, said an industry source. The store-brand line was priced significantly lower than the national labels, so the retailer limited its selection of available brands on the shelf and focused heavily upon the Albertson's brand in the category. As a result, national brands found that business was temporarily lost with the chain in the packaged salad category.

"Over time, the brands have become more [price] competitive," said the source. "Today there is a smaller differential in pricing."

This trimming of the pricepoint differential between the chain's own brand and nationally branded bagged salad items at retail caused Albertson's to reevaluate its position of offering only the own-brand alternatives to its consumers seeking packaged salads, according to the source.

"The consumer's cost savings just aren't as great as they once were," they said. "At the time that we introduced our packaged salads, the Albertson's salads made huge sense for us. Albertson's salad sales outpaced the sales of national brands."

Coupling this new value relationship with a realization of the costs associated with any potential new product development spurred the retailer to examine its own-brand-only approach to the category.

According to close observers of the chain, the one- and two-pound garden salad items are the core of the operator's packaged salad business, and are the most popular size and variety of bagged salad for them. Albertson's will maintain its position to offer only the single, own brand variety in its produce departments with these two items.

After the strategic decision was finalized inside of Albertson's, River Ranch, Salinas, Calif., announced it would become the single supplier of the two-item line.