RICHFOOD MOUNTS PRIVATE-LABEL DRIVE

JENNIFER L. BALJKO

MECHANICSVILLE, Va. -- Richfood Holdings here has launched a major drive to increase private-label penetration among retailers served by its Super Rite wholesale operation.

The company has unveiled an extensive advertising campaign to introduce Richfood's brands to consumers in Super Rite's Baltimore and central and eastern Pennsylvania market areas. Richfood acquired Super Rite, Harrisburg, Pa., last October and has been replacing that operation's private-label program with its own programs.

By touting Richfood's brands to new markets, the company hopes to boost private-label sales shares in the grocery and perishable categories to about 15% in these areas, said John Stokely, president and chief operating officer. Super Rite's private label accounts for less than 10% of total volume in stores currently, while Richfood products generate about 20% of sales in other markets supplied by the company, he added.

The multifaceted Super Rite promotion includes television and radio commercials, print and outdoor advertisements and in-store promotions such as coupons and banners, Stokely said.

The effort is another layer in the melding of the two organizations in areas ranging from distribution to systems to expansion strategies, the company said. On the distribution side, Stokely told SN last week that Richfood is considering opening a meat and produce facility in Pennsylvania. The facility, which may be housed in a new building or existing Super Rite space, would be geared for the Super Rite customer base. He added that while the company is reviewing such a move, he could not say how soon a decision would be made.

The company is also exploring ways to combine the Richfood and Super Rite electronic data interchange systems. Though Super Rite has its own system and Richfood is in the process of upgrading its program, Stokely said there is an ongoing attempt to join the systems and improve capabilities on that end.

Besides integrating operations, Richfood is also focusing on expanding the Metro supermarket chain. Richfood acquired Metro and Basics Food Centers, Super Rite's retail operations, last year as part of the merger with the voluntary wholesaler. Since taking over Super Rite, Richfood has opened two new Metro stores in Baltimore and converted two Basics into Metro stores, said Stokely. A fall opening is planned for another Metro store in Cambridge, Md., and three other sites are being considered for future stores, he added. Stokely said the private-label promotion stems from a determination to beef up private label share in Super Rite markets.

"When we acquired Super Rite, we saw that one of their weaknesses that tied in very nicely with one of our strengths was in the private-label arena," Stokely said. "It was part of our strategy to introduce the Richfood private label in the Super Rite distribution center. We want to capitalize on the natural synergies that come with something like this."

This winter, Richfood started phasing out Super Rite's Market Thorofare label, comprised of dry grocery and limited frozen food products, and replaced the items with Richfood products. The company's private labels include Richfood, a regional label equivalent to national brand quality, and ECON, a generic economy brand. In addition, the company also has the Frosty Acres label from its subsidiary Rotelle.