Speaking on the firm’s second quarter earnings call last week, CEO and chairman Rodney McMullen said the firm’s private label brands had “always been a powerful differentiator for Kroger”, with Simple Truth continuing to see “explosive growth” and Private Selection still “growing in the double digits”.
The latest offering – HemisFares – “brings only the best food finds from around the globe to our food curious customers for an amazing authentic eating experience”, he said.
“Imagine landing in a country known for its incredible food and experiencing the finest examples of its region's most famous and delectable eats. Every HemisFares product is curated from the source and imported directly to our stores. The most exciting part is that no one else has a brand like this.”
Asked how widely available the line would be, he said: “We would expect it to be in almost all of our stores. We think most customers will want to engage with it. On some of the items, there is a limited amount of production. So it's – it's not something that you can just go out and produce twice as much if it sells twice as much.”
No one else has a brand like this
He added: “We find customers are increasingly becoming foodies. And it's really trying to figure out how do you find great products that will satisfy that foodie need experience they want in a way that is actually a very affordable price. And if you look at the quality of this product, if you would go to a restaurant and eat food – eat something of this quality, it would cost four or five times as much as what it costs with us.
“HemisFares is a great example of what makes our corporate brands unique and we think will appeal to millennials, foodies and ultimately all cuts of our customers.”
Chief financial officer Michael Schlotman added: “There are many customers who on some items are a budget shopper, on other items they wind up splurging on particular items.”
Speaking on the Q4 earnings call in March, president and chief operating officer Michael Ellis said store brands accounted for more than a quarter (25.8%) of dollar sales excluding fuel and pharmacy, and 28.2% of units sold.
Kroger reported net earnings up 25% to $433m on revenues up 0.9% to $25.54bn in the second quarter. Total sales, excluding fuel, increased 5.7%, while same store sales were up 5.3%.