Dive Brief:
- Kroger plans to roll out its Treasure Emporiyum private label displays to 200 Marketplace stores this summer, CEO Rodney McMullen announced during the company’s annual shareholders’ meeting Thursday.
- Treasure Emporiyum displays include an assortment of "trend-inspired" store brand products from Simple Truth, HemisFares and other lines, McMullen noted, along with marketing literature and a video monitor showing culinary how-to videos. Kroger began testing the concept in its Newport, Kentucky store last year.
- Kroger also offers an online Treasure Emporiyum shopping portal that includes product discovery features, special deals and recipes.
Dive Insight:
The branding of Treasure Emporiyum brings to mind that of a competing retailer — one that’s whimsical, private-label-focused and hugely popular with consumers.
Is it Albertsons? Walmart?
No matter what seems to have inspired it, the concept is clearly resonating with customers. Kroger needs to keep finding ways to push its private label products given the success of brands like Simple Truth, which in six years has gone from zero to $2.3 billion in yearly sales. All told, Kroger’s "Our Brands" items bring in more than $20 billion annually.
Last year, the company introduced more than a thousand new store brand products, and more than 200 during this year’s first quarter. Kroger operates a sprawling innovation lab where it’s turning out new products like Cuban-sandwich flavored chips. It’s also traveling far and wide for items including a new Simple Truth fair trade tea sourced from Rwanda.
Private label is a clear win for Kroger at a time when it needs as many competitive advantages as it can get. The grocer reported in-line results in its most recent quarter but sits squarely in the crosshairs of discounters, club stores, specialty competitors and other conventional grocery stores. Kroger is slashing prices while at the same time trying to leap ahead on e-commerce with its pricey bet on Ocado-powered automated fulfillment.
McMullen reiterated Kroger’s commitment to digital on Thursday, noting its $5 billion annual run rate and goal to eventually hit $9 billion in the coming years. During a question-and-answer session, a store employee said he felt Kroger was "way out over our skis" with online investments. He said the company isn’t focusing as much as it should be on keeping shelves stocked.
McMullen responded: "A lot of our digital engagement begins in our stores … so please don’t take our conversation on online and digital to mean physical stores are any less important. They are not."
McMullen also announced Thursday that Kroger will open its first downtown Cincinnati store in more than 50 years this September. The two-story location, which took 15 years of planning and prodding by Kroger, will include a 100-seat food hall with five local restaurant brands, as well as a Starbucks, a Murray’s Cheese bar and an assortment of fresh and shelf-stable groceries.
