Simple Truth Shines in Krogers Q1

Late last week Cincinnati based grocer Kroger reported its First Quarter 2019 results and provided a Restock Kroger progress update on the company’s three-year transformation plan.

Total company sales were $37.3 billion in the first quarter, compared to $37.7 billion for the same period last year. This decrease is due to the sale of Kroger’s convenience store business unit. Total sales, excluding fuel and the effect of selling the convenience store business unit, increased 2.0% from the same period last year.

Gross margin was 22.2% of sales for the first quarter. FIFO gross margin, excluding fuel, decreased 40 basis points from the same period last year, primarily due to industry-wide lower gross margin rates in pharmacy.

Identical-store sales edged up 1.5% excluding fuel, compared with a 1.9% gain in the prior-year period.

gSales from the Kroger Private Brand portfolio up 3.3% vs. prior year, led by double-digit growth in their natural and organic brand Simple Truth. The retailer also launched 219 new Private Brand products.

Kroger also introduced a test of new Home Chef Private Brand meal solutions, including oven-ready options, Heat & Eat choices, and lunch kits.

Kroger Chairman and CEO Rodney McMullen

Chairman and CEO Rodney McMullen noted “Because the retail industry is constantly transforming, we proactively launched Restock Kroger to deliver for our customers and shareholders. It all starts with our customer obsession, which is why Kroger is assembling a platform to deliver anything, anytime, anywhere.

We are building momentum in the second year of Restock Kroger, which is off to a solid start. The entire company is focused on redefining the grocery customer experience, improved upon by exciting partnerships that will create value. We are on track to generate the free cash flow and incremental adjusted FIFO operating profit that we committed to in 2019 as part of Restock Kroger. We are confident in our ability to deliver on our plans for the year and our long-term vision to serve America through food inspiration and uplift.”

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Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.