NEW YORK – Kroger continues to see sales growth in its Simple Truth and Simple Truth Organic lines of private label products, according to Rodney McMullen, chairman and CEO.
“If you look, we’ve had double-digit identical sales growth in that category for several years consecutively,” he said March 15 during a presentation at the Bank of America Merrill Lynch Consumer & Retail Tech Conference. “… To say it’s slowing down, it actually isn’t as much as I would have guessed given the size of the numbers that we’re starting to see.”
McMullen said Simple Truth line sales were approximately $1.5 billion in 2015, an increase compared to 2014 when the company said sales were approximately $1.3 billion.
“I think it’s just becoming more and more of the lifestyle people choose to live with, eating healthier, preparing food at home,” said Mike Schlotman, CFO.
McMullen said food is more important than ever to consumers, and that is a driving force behind the demand for natural and organic products. He added that such significant life events as the birth of a child tends to accelerate demand for the specialty products.
“Overall there's a general trend in that direction,” he said. “But it’s not like light switches going on and off.”
It may be argued that Kroger’s new store format, Main & Vine, is an offshoot of the company’s learnings around the natural and organic retail space.
“… It’s really the trends that we've seen from our own natural and organic business over the last three or four, five years,” he said.
Store offerings include an expanded fresh assortment, local products such as coffee, cheese and bakery items, and a wide selection of natural and organic products under the company’s Simple Truth brand and national brands, such as Justin’s and Annie’s.
“We would anticipate the shop frequency would be more where people would come in and just pick up dinner or lunch or something versus a big shop,” McMullen said. “But it’s still very early in the process.”