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grocery Kroger

Win a $10,000 Scholarship with Private Brand.

\"Kroger-comfortsfirefly\"

\"comforts-infant\"Kroger and its other banners: Fred Meyer, Ralphs, Pay Less Supermarkets, King Soopers, Quality Food Centers, Hilander, Smiths Food & Drug, Jay C Food Stores, Dillon, Fry\’s, Baker\’s, Gerbes, Food 4 Less, Owen’s, Food Co and City Market have announced a Private Brand promotion. They are asking customers across America to help name their mascot, FireFly and in doing so, you have the chance to win a $10,000 college scholarship to help fund their child’s college education.

It is definitely and intriguing way to engage the target customer, parents. Google the contest and you will quickly discover that the have also heavily invested in sponsoring social media. Using a network called Social Spark they have purchased significant paid placement on many blogs with corresponding blogvertorials.

According to the Social Spark web site:
SocialSpark is a blog marketing network that connects advertisers with bloggers through an online marketplace.
Blog Advertising: Advertisers can purchase blog marketing as sponsored posts or blog ads. Pricing for our blog advertising solutions include PPP, CPA and pay per day blog sponsorship.
Make Money Blogging
Bloggers can make money blogging by either placing ads on blogs or writing blog reviews. All bloggers must adhere to our strict Code of Ethics.

In a Google Search for “Comfort $10,000” seven of the first ten items found were blogs providing this service.
To enter the contest go to www.comfortsforbaby.com. The winner will be announced online after September 21, 2009, good luck!

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Kroger

Kroger Quality Testing & Award WInning Pies

\"Kroger

Take a look at this fascinating article the Cincinnati Enquirer on Kroger’s award winning Private Brand products and how they bring them to market. This would stand as a excellent example for retailers all across the country.

\"KrogerHow Kroger tests its private brands
By John Eckberg • May 15, 2009
Four of Kroger\’s Private Selection pies won blue ribbons in the commercial category at the national Great American Pie Championship sponsored by the American Pie Council in Lake Forest, Ill.
The designation belies any suggestion – at least in the pie category – that Kroger Co.\’s branded products are cheap and inferior versions of national brands.

Shopper Kathy Beall of Blue Ash never needed any convincing. While price drives many consumers to turn to private brands, not so with Beall.

\”I look and shop for them,\” Beall said on a recent weekday morning, as she reached into a Kroger shopping bag at the still-new Kroger at Kenwood Towne Place.

\”This Bacon & Honey French salad dressing only cost 88 cents. That saved me $2 or more.\”

Taste and quality aside, a rough economy has led a growing number of households – including affluent consumers – to turn to private brands as a way to stretch their food dollar.

According to a recent report from Chicago-based NPD Group, 24 percent of all food and beverages served in American homes in 2008 were store brands. That is an increase of 33 percent from the 18 percent tally in 1999.

Today, 97 percent of all households shop for private-label foods, NPD found.

During 2008, 26 percent of Kroger\’s grocery sales came from private brands, and Kroger brands reached a record-high 34 percent of grocery unit sales.

Kroger is a trend-setter when it comes to private brands, said Sue Welch, chief executive of Tradestone Software, Gloucester, Mass., a software company that focuses on retailers with private-label initiatives.

A typical Kroger store stocks about 14,400 private-label items – nearly double the 7,800 items stocked in 2003.

\"Krogerlogo\"\”The consumer has looked and said private label isn\’t a bad thing,\” Welch said. \”Many private labels are becoming brands, to the point that consumers are not aware it\’s a store label.

\”Grocers can put ads behind them with in-store brands, displaying with prominence, and that gives the private labels a huge advantage.\”

Also, Private Selection, the company\’s premium tier of store brands, exceeded $1 billion in sales in 2008.

\”In this environment, people are more willing to try our brands and we are seeing that month in and month out,\” said Meghan Glynn, a Kroger spokesperson.

For Kroger, the epicenter of the company\’s private-brand initiative is in downtown Cincinnati in a laboratory and test center tucked away in the first floor of the corporate headquarters.

Few of those thousands of products make it to store shelves without first passing muster with consumers who come to the laboratory to sample items each week.

Three afternoons a week, anybody who works in the building – many if not most are Kroger employees – line up to rate a variety of foods on a bank of computers.

On one recent afternoon, the offering was a cranberry, mango, vegetable and fruit medley in honey-lime seasoning.

All of the potential brands are judged with a rigorous survey. Testers cannot talk.

They must rank foods across a number of detailed categories, such as overall liking, flavor, appearance and texture.

A nine-point rating scale is nuanced with impressions such as \”like extremely, like very much, like moderately, like slightly and neither like nor dislike.\” The dislike category is equally detailed.

Testers are paid with chocolate candy, cookies and free coupons for their trouble – as well as the free plate of food being tested.

Read the entire article.

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Kroger

Kroger Up 8% on Strength of Private Brands.

This week Cincinnati based grocer, Kroger reported that 200 fourth-quarter profits rose 8% (Dow Jones Newswire) from a year ago as sales of its Private Brands reached record-highs. Kroger further reported that is Private Brands hit a record 35% of total grocery unit sales, driven by the Kroger Value and Kroger Private Selection brands. Kroger operates 2,481 stores in 31 states, as well as regional chains including Ralph\’s, Fred Meyer and Food 4 Less. Here is a great news video from CBS news in Denver, Grocery Stores See Surge In Store Brand Sales.

This is no surprise given that Kroger has worked hard to build a robust and customer relevant multi-tiered portfolio of Private Brands. Here is my take on their architecture:

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Check out the Kroger website for some well done Private Brand Commercials.

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Kroger Ralcorp

Economy Drives Private Brand Sales

This from article from Investopedia illustrates the positive impact a worsening economy will have on Private Brand and the negative impact it will have on the national brand competitors. The key question is whether Private Brands will be able to maintain their gains after the economy rebounds.

Food For Thought In 2009

January 02, 2009 | By Will Ashworth

This year was a good one for most food companies as they were able to remain profitable despite the economy, but not all food companies were immune to the slowdown. Companies with higher-priced brands like Kraft (NYSE:KFT), Heinz (NYSE:HNZ) and Lancaster Colony (Nasdaq:LANC) all took a hit in 2008. Although, to be fair, their hit was nothing like the 40% drubbing the S&P 500 took. Astonishingly, Kraft\’s stock was still in the black as late as October.
Economically, we know it\’s going to be tough in 2009, so what does this mean for food stocks? Well, people still have to eat.

Trading Down

In mid-December, Kroger (NYSE:KR) indicated that its customers were trading down in a big way to its own private label products, eschewing name brands for less costly alternatives. According to Kroger, 14% of its customers traded down to its house brands. That might not seem like a lot, but spread across other large chains like Safeway (NYSE:SWY) and Supervalu (NYSE:SVU) and you don\’t have to be an economist to see that it will hurt food stocks with premium-priced brands. The price increases the big-name food makers took earlier this year might need to roll back if the recession continues for an extended time. Grocers certainly will argue that tumbling commodity prices warrant reductions. It will be interesting to see how it plays out in 2009. Personally, I can\’t see the food companies giving back those gains but you never know if things get dicey. (Bear markets can terrify even seasoned investors. (To learn how to invest safely, read Four Tips For Buying Stocks In A Recession.)

Private Label Growing

Kroger\’s private label products now account for 26% of its overall business. It\’s clear that makers of private label products will benefit in 2009. Ralcorp (NYSE:RAH) is a company I wrote about in 2008; it is the biggest publicly traded, private-label food manufacturer in the U.S. and it has an excellent opportunity to benefit from the consumers desire to cut grocery spending. In 2008, Ralcorp integrated Kraft\’s Post cereal unit, which it bought for $2.6 billion in an all-stock purchase. Under the deal, Kraft shareholders would own 54% of Ralcorp stock after it is completed. Questions remain whether the private label company can market name brands as well. I believe it can and Kraft shareholders will benefit indirectly from this, reducing the hit, if any, they might take on the Kraft side of business.

The Winners Circle

Kraft\’s management foresees 4% organic growth for the company in 2009 with GAAP earnings per share (EPS) of $2.00, up from $1.54 in 2008, which excludes a 42 cent per-share net gain from the Post sale. It\’s clear by its statements in the press that it doesn\’t feel the economic headwinds will hurt it in a substantial manner. I tend to agree. Its brands are strong. Heinz is confident fiscal 2009, which are at the end of March, will produce organic sales growth of 6% and EPS between $2.87 and $2.91. As for 2010, it is less eager to provide guidance until the year end due to the economic uncertainties. Compared to management at Kraft, they appear a little more worried about the implications of a prolonged recession on their business.

Lastly, first quarter results for Lancaster Colony, ended September 30, 2008, were a mixed bag. Most importantly, however, its specialty food operation increased sales by 19% to $220.8 million, representing 84% of its business. The remainder was from its candle business. While still in a transition, management feels the move to become more of a food operation will help it weather the slowdown in 2009. I couldn\’t agree more.

Bottom Line

Kraft, Heinz, Lancaster Colony and Ralcorp all have high hopes for 2009. Managers are expecting organic earnings growth as customers seem to absorb the higher costs associated with increased commodity prices. In addition, with the exception of Ralcorp, they all pay nice dividends. When considering stocks like this, remember, people need to eat.