Late last week America’s largest traditional grocer Kroger reported its Q4 2020 Results – in an Earnings Call led by Chairman and CEO Rodney McMullen. Private Brand once again took center stage as one of the retailer’s 4 competitive moats, seamless, personalization, fresh, and “our brands”.

CEO Rodney McMullen spoke optimistically about the results

“Kroger continued to grow market share during the quarter. Our ability to meet our customers’ evolving needs is a testament to our deep competitive moats, disciplined investments in our increasingly robust digital capabilities, as well as our associates’ relentless focus on our customers. We finished fiscal year 2020 with strong sales and earnings, as heightened demand for fresh, convenient food and meal solutions across modalities, including in store, pick up and home delivery, continued throughout the fourth quarter.”

McMullen went on to address private brand:

“Our brands achieved its best year ever in 2020 exceeding $26.2 billion in sales. Our Simple Truth brand achieved a major milestone exceeding a $1 billion in annual sales for the first time and this is the brand that was created from scratch a little over five years ago.

We saw a 20% growth in our premium culinary brand Private Selection as more people continue cooking at home and elevating their meals. Our Simple Truth Plant Based platform launched 53 new items in 2020. One of the key launches for the year was Simple Truth Oatmilk ice cream. This line has brought new customers to the category and sales are continuing to outpace projections. Over 1.4 million new households have purchased from the Simple Truth Plant Based platform this year. As we hold high standards for the taste and experience of our plant-based products just like the rest of our brands portfolio. Our trial rate has continued to grow and our repeat rate has continued to strengthen.”

Kroger’s Fourth Quarter 2020 Highlights

Customer Obsession

  • Private Brand achieved its best year ever, exceeding $26.2 billion in sales
  • Simple Truth achieved a major milestone, exceeding $3 billion in annual sales for the first time and launched 53 new items in the Plant Basedcollection
  • Expanded to 2,223 Pickup locations and 2,472 Delivery locations, covering 98% of Kroger households
  • Expanded partnership with Ocado with plans to construct an additional Customer Fulfillment Center in the Southwest U.S.and leverage capabilities from its in-store fulfillment solution with the best of Kroger’s solutions to support the rapid growth of pickup demand
  • Kroger Precision Marketing was rated #1 for Targeting Effectiveness, Measurement Capabilities and ability to drive CPG Sales (tie) in a survey by the Path to Purchase Institute
  • Kroger Health administered more than 665,000 COVID-19 vaccines as of February 28thto eligible populations and was selected to be part of the Biden’s Administration’s Federal Retail Pharmacy Program. Additionally, launched a new COVID-19 vaccine scheduling tool and hotline
  • Celebrated first anniversary of the brand launch, new logo design and Fresh for Everyone campaign

Associate Experience

  • Continued investment in Kroger associate wages has increased Kroger’s average hourly wage to $15.50 an hour, with an average hourly rate over $20 per hour with comprehensive benefits factored in, benefits that many competitors don’t offer
  • Invested nearly $1 billion to secure pensions for over 30,000 associates
  • Helping Hands Fund issued 5,722 grants in 2020 to assist associates facing hardships
  • Announced a $100 incentive for all associates who receive the COVID-19 vaccination
  • Vaccinated 38,000 associates against COVID-19 as of February 28th
  • Invested approximately $275 million to reward associates and to protect them and customers through the continued implementation of dozens of safety measures during the fourth quarter
  • More than 3,100 associates, 86% of whom are hourly, have taken advantage of Kroger’s best-in-class education assistance program in 2020 alone

Live Our Purpose

  • The Kroger Co. Foundation announced recipients of the Racial Equity Fund Build It Togethergrant challenge, an initiative awarding $3 million in grants and forging partnerships with innovating organizations to help build more equitable, inclusive communities
  • Introduced the founding members of Kroger’s Diversity, Equity & Inclusion Advisory Council, which will work closely with senior leaders and associates to ensure the company continues to create a more equitable future for the communities we serve
  • Named one of the Best Places to Work for LGBTQ Equality for the third consecutive year
  • Named to the Dow Jones Sustainability North America Index(DJSI) for the eighth consecutive year
  • Recognized by Newsweek as one of America’s Most Responsible Companies of 2021
  • Reduced total waste sent to landfill – including food waste – by approximately 5% in 2020 through Zero Hunger | Zero Waste initiatives