Why Kroger's Private Label Brands Are Booming

If you live in the U.S., chances are you've shopped in a Kroger grocery store, either in your hometown or while traveling. According to the supermarket chain, it's the largest in the country, boasting almost 2,800 locations in 25 states. You might not, however, know Kroger by that name alone, as the company operates stores under a whopping 28 monikers, including City Market, Dillons, Ralphs, and Smith's (via CNBC). But whatever name your local Kroger goes by, you're most likely familiar with the store's private label (in-house) brands of groceries and goods, which number more than 12 and include Simple Truth natural and organic options and Private Selection gourmet foods. 

Praised by shoppers for their value relative to their cost, Kroger's private label brands have seen a boom in sales in recent months, mostly due to one decisive factor — inflation. According to Food Business News, more and more Kroger shoppers are taking advantage of the store's competitively priced private label options as they contend with record-high rates of inflation that are causing the prices of staple foods such as eggs, flour, chicken, and milk to soar sky-high (via CNN Business).

According to Food Business News, Kroger's brands are performing extra well for the supermarket giant over the past few months. As an increasing number of shoppers look to manage their grocery bills in the face of record inflation, they're turning to lower-priced labels for deals on items ranging from organic hummus to bronze-cut Italian pasta. The outlet reports that Kroger's sales of private label brands jumped a whopping 10.2% from last year — helping to bump the chain's net earnings for the second quarter ending August 13 up to $731 million, as compared to $467 million for the same period last year.

As noted by W. Rodney McMullen, the chain's chairman and chief executive officer, shoppers are buying up the store's private label brands as well as its phenomenally successful meal kit line, Home Chef. "Convenience remains a priority, and Home Chef is meeting that need by providing high-quality family meals as a budget-friendly alternative to eating out at restaurants."

It's not just Kroger shoppers that are increasingly opting to go for private label offerings, according to data compiled by the Food Industry Association (via Grocery Dive). A surprising 41% of shoppers that were surveyed this spring reported buying more store brands than before the pandemic, with 77% of those shoppers saying they plan to continue to shop store brands in the future. It looks like when it comes to saving money in these crazy times, store-brand food is a solid option for many.