business news in context, analysis with attitude

Cleveland Research is out with an analysis, apparently being circulated to its manufacturer clients, in which it analyzes the moves being made by Kroger to change the ways in which it operates and looks to regain sales and profit momentum. Key to the strategy, the Cleveland Research report says, will be less reliance on national brands even as the retailer demands that all its branded suppliers reduce the cost of goods; at the same time, the report says, it expects Kroger to raise selected brand prices “to help enhance gross margins.”

Meanwhile, the analysis says that Kroger plans to put a heightened emphasis on private label, using as its informal benchmark high own-label penetration numbers in Europe. The retailer is said to be persuaded by blind taste-testing that its private label flavor profiles are superior to those of national brands.

In addition, the report says, “Slotting will be collected for appropriate warehouses. Swapping out flavors is considered a new item and does require slotting. Only size and formula changes to same flavor item is excluded.”
KC's View: