The Kroger Co.’s introduction of two private label brands — Simple Truth and Simple Truth Organic — last fall has been “a huge home run,” Rodney McMullen, president and chief operating officer, said during a March 7 conference call with analysts to discuss fiscal 2012 results.
In the year ended Feb. 2, net income at Kroger totaled $1,496.5 million, equal to $2.78 per share on the common stock, up sharply from $602.1 million, or $1.01 per share, in fiscal 2011. Net sales increased 7% to $96,751.3 million from $90,374.4 million.
Mr. McMullen said the strength of Kroger’s private label business helped drive the growth. During fiscal 2012, Kroger introduced 588 new private label items in the grocery department, with many sold under the Simple Truth and Simple Truth Organic brands launched last fall. Simple Truth and Simple Truth Organic brands generated fiscal 2012 sales that exceeded Kroger’s internal goal by 33%, Mr. McMullen said.
“Obviously, this has been a huge home run,” he said. “We plan to continue developing innovative products that solve unmet needs and that our customers won’t find anywhere else in 2013.”
Products marketed under the Simple Truth and Simple Truth Organic brands are free from 101 ingredients some of the retailer’s customers have said they do not want in their food, and Simple Truth Organic products are certified under the U.S. Department of Agriculture’s National Organic Program.
All Simple Truth and Simple Truth Organic products are marked with the brand’s green circular logo and contain ingredient statements. Simple Truth Organic items display the U.S.D.A organic seal on the front of packaging, while Simple Truth products have visible identifiers that indicate their category.
