Kroger promotes key executives to support Restock initiative

Dive Brief:

Kroger has announced some key executive changes this week. On Wednesday, Kroger promoted Gil Phipps to vice president of branding, marketing and Our Brands. Phipps currently serves as vice president of Our Brands and will take on his additional roles effective Aug. 15.
On Tuesday, the company named Valerie Jabbar group vice president of merchandising, effective Sept. 1. She is currently the president of the Ralphs division. Mike Murphy, currently vice president of operations for the Columbus division, will succeed Jabbar in that role.
These positions come as Kroger continues its Restock Kroger plan aimed at “strategically repositioning Kroger to accelerate customer-centered efforts in order to create shareholder value.” This includes creating new and relevant customer experiences delivered both digitally and in stores.

Dive Insight:

Kroger is less than a year into its Restock Kroger plan and this week’s executive announcements illustrate some of the company's points of focus. Phipps’ elevation indicates that the company’s private label business could become an even bigger part of the overall business, intertwined seamlessly into the company’s general branding and marketing strategy. Or, it could mean that the company simply has the confidence in Phipps to translate the success he’s had with the Our Brands business into the bigger, company-wide strategy.

Phipps has overseen the Our Brands business as it increased customer loyalty and sales growth, according to a company press release, including Simple Truth, which — as the largest natural and organic brand in the U.S. — generates more than $2 billion in annual sales.

In a highly competitive category, Kroger has managed to differentiate itself from Amazon and Walmart in large part because of its private label presence. Private label development is a critical key in creating customer loyalty. According to research firm Field Agent, 83% of Kroger’s customers say they purchase private label products from stores.

Private label is also on trend. Store brands now make up 17% of all grocery sales, according to the Private Label Manufacturers Association, and could grow market share by as much as 10% over the next decade. Phipps has steered Kroger’s success using data, marketing and “relevant, meaningful and personalized” experiences and there is no reason to believe he won’t be able to do the same across the company’s entire business as he adds the marketing and branding role to his resume.

As grocers jockey for market share via convenience-driven initiatives and new technology, Phipps is laser focused on product innovation.

“This is where retailers will differentiate themselves going forward,” Phipps told Food Dive in a previous interview.

His elevation complements the announcement of Jabbar as vice president of merchandising. Phipps has mentioned that Kroger is focused on making its store brands as visible as possible for customers and Jabbar will be charged with doing just that. The company already has a head start, with Oppenheimer analysts observing Kroger’s private label placement in the “valuable end cap space.”

Kroger is investing a lot of funds and time into its technology measures that have kept the company competitive with e-commerce powerhouse Amazon, namely with its EDGE shelf display and partnership with automated warehouse company Ocado. These executive promotions, however, prove that the company is also intensely focused on the marketing and branding side of things, where it will leverage an abundance of data to cultivate loyalty, which is hard to come by in the grocery space.