The Friday Checkout is a weekly column providing more insight on the news, rounding up the announcements you may have missed and sharing what’s to come.
It’s no secret that retailers have been expanding their private label assortments in recent years. But a prolonged period of inflation seems to be fueling an even faster pace of product rollouts and innovation.
In the slew of earnings calls this week, increasing emphasis on private brands stood out as a common thread among the several grocers and discounters reporting their latest quarterly results. Top executives for Sprouts Farmers Market, Target, Kroger, Dollar Tree and Grocery Outlet noted that store brands are resonating with consumers seeking value.
“Our Brands' quality and value proposition [are] especially important when inflation is affecting so many of our customers' lives,” Kroger CEO Rodney McMullen told investors Thursday morning, noting that the grocer launched budget grocery brand Smart Way last September. Kroger recorded private label identical sales of 10.1% for its fourth quarter.
Late last year, Sprouts achieved the milestone of hitting $1 billion in private label sales, Jack Sinclair, the grocer’s CEO, said on the Thursday Q4 earnings call. Sinclair claimed the company’s “focus on innovation” largely drove those sales and noted that the grocer plans to add new store brand products this year as it looks to accelerate that sales growth.
Kroger, Target, Dollar Tree and Grocery Outlet executives also said their companies will expand their private label assortments. The growth of store brands comes at a time when grocers are looking to benefit from the higher margins they often see from private label while also appealing to price-sensitive consumers.
Dollar Tree CEO Rick Dreiling said the company is planning to add “hundreds of national brand equivalents” to its consumables private label portfolio in the back half of the year. Top executives at Grocery Outlet said the upcoming expansion of its currently small private brand selection is connected to its broader SKU growth in recent years, which has seen the discounter add more NOSH, fresh, ethnic and local items.
Along with planning to add more products to its private brand portfolio, Kroger executives noted that the grocer has made progress on its sustainable packaging goal for store brands. Industry observers have pointed to packaging as a key area where grocers can boost their store brands, from highlighting product attributes to making more environmentally-friendly containers.
In case you missed it
New legislation aims to scale back self-checkout
Rhode Island legislators have proposed a new bill that, among other measures, would aim to limit the number of self-checkout stations in grocery stores to only eight operating at any one time per location. One staff person must operate a traditional checkout lane per open self-checkout station.
Sponsoring the bill is Democratic Rep. Megan Cotter, who hopes the bill will highlight how stores are using technology to cut employment costs. Other reasons for introducing the bill include reducing theft and addressing a lack of accessibility, specifically for the elderly.
"One recent survey shows that 67% of shoppers have experienced problems with self-checkout [lanes]. And it is incredibly difficult for some folks with disabilities [like] the elderly,” said Cotter told a local news outlet.
IGA acquires What Brands Want
The Independent Grocers Alliance (IGA) has acquired management consulting service What Brands Want to expand its resources for its independent grocers, according to a Thursday press release.
What Brands Want’s clients include General Mills, Walmart, Johnson & Johnson and other notable companies, providing marketing and data analysts tools, strategy and omnichannel development, among other services, the announcement notes. These services will now be incorporated into the IGA Red Oval program, which aims to support manufacturers and help them market themselves to independent retailers.
Owner and founder Michael La Kier will oversee IGA’s Red Oval partner relationships as vice president of brand development, per the announcement.
Acosta combines omnichannel retail, marketing and foodservice agencies
The sales and marketing company has launched Acosta Group, a unified end-to-end solutions platform that connects sales service, omnichannel retail solutions, in-store selling and training, marketing tools, foodservice sales and culinary solutions along with data insights, according to a Tuesday press release.
"Across our agencies, we are investing in the expansion of our strategic capabilities and simplifying access to our suite of services,” Acosta Group CEO Brian Wynne said in a statement.
Acosta Group has over 2,500 clients across North America and Europe, consisting of brands, retailers and foodservice providers who use the platform to connect customers to products both in-store and online.
Number of the week: 1 million
That’s the number of pounds of food Giant Eagle has prevented from going to landfills through a partnership with Flashfood, which runs an online platform that lets shoppers buy items like meat, seafood, produce and dairy products nearing their best-by date at a sharp discount, the companies announced Tuesday. The grocery chain, which is striving to divert 90% of its waste from landfills by 2025, has saved customers almost $2.5 million as a result of its collaboration with Flashfood, according to the announcement.
BJ’s Wholesale Club, UNFI to post earnings
The grocery wholesaler and retailer will release its results for the second fiscal quarter of 2023 on Wednesday, while the membership retailer will publish details about its performance during the fourth quarter of 2022 and all of last year on Thursday.
Latest hiring data
The U.S. Bureau of Labor Statistics is scheduled to release employment statistics for February next Friday. The numbers will show whether the brisk job creation that took place in January continued last month.