EXCLUSIVEBRANDSOURCING RETAILER/WHOLESALER ...

Spa/Bath & Body Therapies (all bath & body products), Buena Comida
(Mexican),Wholesome@Home, and the licensed Disney Magic Selection brand (foods,
beverages, personal care products, etc.).
EB skus: 20,000+
Profile: Kroger (NYSE: KR) is regaining its strong market positioning achieved just prior to the
US recession from 2008 onward. The year 2011 resulted in a pretty solid sales gain, significantly
boosted by fuel sales. In 2009, those sales represented 11.7% of total revenues; they now represent
18.7% of the total. Kroger operates 1,700+ fuel centers, their sales up a whopping 42.6% to nearly
$ 13 billion. Net income for the year fell by 46.1% to $ 602 million. Some $ 953 million paid to
multi-employee pension plans, based on collective bargaining agreements, affected this drop. Not
counting that payout, Kroger’s net earnings in 2011 would have been $ 1.2 billion +9%. While
Kroger does not break out its corporate brand (exclusive brand) sales, the company reports in the
fourth quarter of 2010, 27% of its grocery sales come from its own brands and, in terms of unit
sales they represent 35% of sales. (Calculating from Kroger’s total supermarket/multi-department
sales, its corporate brand sales could easily exceed $18 billion.) In its 2010 Fact Book, Kroger
reports that it is moving its store banner brands from national brand equivalent quality to
mainstream quality; some 13 key product categories have been earmarked with updated product
and packaging refinements. Kroger also launched ‘light blue’ packaging to signal now in fat
and/or calories. New varieties of bread, soup, cereals, etc. have been introduced under its own
brands. Also its Private Selection range now includes a new line of lamb and veal, ice cream in
pints, and frozen pizza. In its 2011 Fact Book, Kroger reported the launch in November of Simple
Truth and Simple Truth natural and organic products. These products, advertised as free from 101
artificial preservatives and other ingredients that customers avoid in foods, cover some 250
products. By January 2013, Kroger expects these brands to appear in more than 40 product
categories and be available throughout its chains nationwide. The retailer also launched a bilingual
corporate brands website for its Comforts for Baby brand. Overall, Kroger's banner brand sales
(those under the store brand identity, i.e., Kroger, Ralphs, etc.) rose by 8% in 2011; while Private
Selection brand (some 1,000+ items) had almost a 5% sales gain for the year.
Procurement Contacts: Dan Griffin, Senior Category Manager, Grocery Procurement; Linda
Severin, Vice-President, Corporate Brands; Joyce McIntosh, Sourcing Mgr., Corporate Brands;
Graham Lee, Beverage Mgr. (Tel: 310-884-9000); Orlando Gutierrez, Finance Mgr.Corporate
Brands; Wayne Abbot, Vice-President, National Purchasing at Fred Meyer (Tel: 503-797-5861)
KUM & GO, L.C.
6400 Westown Parkway, West Des Moines, IA 50266 USA
Tel: (515) 226-0128
Fax: (515) 226-1595
www.kumandgo.com