Dive Brief:
- Natural grocer Lucky's Market will now sell Kroger's Simple Truth private label products in all 39 of its stores, according to a press release sent to Grocery Dive.
- The company has tested the sale of Simple Truth products at 20 stores in Florida and Georgia this year, and has seen a positive response from shoppers.
- Simple Truth products "meet or exceed" Lucky's natural organic program standards, the company said. Lucky's will continue to sell its own private label products as well.
Dive Insight:
Colorado-based Lucky's Markets and Kroger entered a strategic partnership in 2016, with Kroger making a "meaningful" but undisclosed investment in the specialty retailer. Since then, Lucky's has been able to add locations, expand product assortment and offer lower prices with Kroger’s support.
The introduction of Kroger's Simple Truth brand in Lucky's stores deepens the partnership between the two retailers. It helps Kroger reach a segment of customers it wouldn't otherwise, especially in Mountain states like Colorado, Montana and Wyoming and states in the South including Florida and Georgia, where Lucky's operates.
Lucky's, meanwhile, benefits from a popular, well-established private label brand that aligns with its core values. Kroger sells more than $2 billion worth of Simple Truth private label products annually, and continues to expand the label's assortment. While the brand is primarily available to Kroger banners, there is a wide variety of Simple Truth and Simple Truth Organic products available on Amazon. The line is also available in select Walgreens stores and on Alibaba's Tmall online marketplace.
Kroger doesn't have stores in Florida except for a lone Harris Teeter, but it will soon have a significant sales presence via the automated fulfillment center it recently began constructing with Ocado. Offering Simple Truth products to in-state customers could help smooth Kroger's e-commerce entry. Lucky's is also planning to open a distribution center in Orlando this fall, the company said, which will help it bring in more product assortment, lower costs and help customers save more.
Private label products are a bright spot for retailers as consumer interest stays high. According to Nielsen, private label CPG sales have grown by $7.9 billion in brick-and-mortar stores over the last three years, and have increased to 3% of online dollar sales, up from 1.3% two years ago. Whether it's tried-and-true brands from well-known grocers such as Albertsons and Kroger or new private label offerings from online-only retailers like Boxed and Amazon, shoppers are all-in on store brands, and retailers are looking for new ways to win market share.
