Grocery giants Kroger and Albertsons are aggressively expanding their private label offerings, launching hundreds of new products that cater to evolving consumer preferences for quality and value. Kroger has introduced innovative items across its Private Selection, Simple Truth, and Kroger brands, while Albertsons is focusing on trendy lemon-themed products under its Signature Select, Overjoyed, and Soleil labels. These strategic private label expansions represent a combined $46.5 billion annual business that’s growing rapidly as consumers increasingly view store brands as equal or superior to national alternatives. The pending $24.6 billion merger between these retailers would create a private label powerhouse with over 34,000 products, potentially reshaping the grocery landscape across America.
Kroger’s Ambitious Private Label Growth Strategy
Kroger has dramatically expanded its store-brand portfolio with five innovative new items across its established private label brands. The retail giant’s latest offerings include muffins available in four enticing flavors, six varieties of ready-to-serve salad kits, Kroger Kettle Style Cooked Tortilla Chips, Kroger Restaurant Style Italian Dressing, and Simple Truth Organic Instant Mushroom Tea. These additions reflect Kroger’s thoughtful approach to providing options that combine convenience with quality.
“Kroger Our Brands’ unmatched flavor and value make them a favorite for many customers,” noted Mike Murphy, Group VP of Center Store Merchandising at Kroger. The scale of Kroger’s private label operation is truly impressive in the industry. With over 13,000 private label items generating $30 billion in annual sales, Kroger has established itself as a private label powerhouse. These products are produced in 35 company-operated manufacturing plants, giving Kroger direct control over quality and production.
The company’s commitment to private label brand expansion is evident in its fiscal 2024 performance, when it launched more than 900 private label products. Notably, 370 of those new items were in the fresh category, highlighting Kroger’s strategic focus on areas where consumers are increasingly seeking quality alternatives to national brands. This emphasis on fresh items aligns with broader consumer trends toward healthier eating and meal preparation at home.
Albertsons Embraces Citrus Innovation
While Kroger expands across various categories, Albertsons has taken a more thematic approach to innovation. The company has introduced over 20 new lemon-themed items that capitalize on consumers’ affinity for bright, refreshing flavors. These products span multiple private label lines including Signature Select, Overjoyed, and Soleil brands.
The creative lemon-inspired lineup includes unexpected offerings such as lemon potato chips, lemon black pepper popcorn, and lemon-flavored mini cookies. Albertsons has also released seasonal Soleil sparkling water in limited-time flavors that complement the citrus theme. These innovative snacking options demonstrate Albertsons’ ability to track and respond to flavor trends while differentiating its private label products from competitors.
Particularly notable is the expansion of the Overjoyed brand, which now features lemon-flavored wafer rolls, strawberry lemonade trail mix, and lemon white chocolate cones. These premium indulgent offerings allow Albertsons to compete in higher-margin specialty categories traditionally dominated by national brands. Albertsons’ private brand business has grown to include approximately 14,000 items, generating $16.5 billion annually.
In fiscal 2024 Q3 alone, Albertsons launched 82 new private-brand products, maintaining a steady pipeline of innovation. Omer Gajial, EVP of Merchandising & Chief Digital Officer at Albertsons, emphasized this strategy: “By investing in our own brands and introducing innovative products, we’re adding value and excitement for our customers.” This focus on unique offerings helps Albertsons stand out in a competitive marketplace while building customer loyalty.
The Strategic Value of Private Labels
Private label products have evolved from basic generic alternatives to sophisticated brand experiences in their own right. For retailers like Kroger and Albertsons, these exclusive products serve multiple strategic purposes beyond mere profit margins. First and foremost, private labels create exclusivity that helps these grocers differentiate themselves as shopping destinations. Customers can’t find Private Selection or Signature Select products anywhere else, creating a pull factor that drives store traffic.
Market data highlights the financial significance of this strategy. Kroger leads with $30 billion in private label sales, while Albertsons generates $16.5 billion from its store brands. Beyond revenue, these products typically offer higher profit margins than national brands, contributing disproportionately to bottom-line performance.
Consumer perception of private labels has undergone a remarkable transformation. According to Circana’s market report, 69% of shoppers now view private label quality as similar or superior to national brands. This represents a significant shift from earlier decades when store brands were primarily seen as budget alternatives with compromised quality. Today’s health-focused snacking trends are often led by innovative store brands rather than following national brands’ lead.
Private labels also provide retailers with valuable flexibility. During inflationary periods, they can maintain more stable pricing on private label products, offering customers refuge from rising costs. This pricing strategy helps retain price-sensitive shoppers who might otherwise switch to discount retailers. The data, packaging, and pricing control inherent in private label programs gives retailers like Kroger and Albertsons powerful tools for responding to market conditions.
The Pending Merger: Creating a Private Label Powerhouse
The proposed $24.6 billion merger between Kroger and Albertsons, announced in October 2022, would create an unprecedented private label empire in American grocery retail. If approved, the combined entity would control a portfolio encompassing approximately 34,000 private label products and generate around $43 billion in private label sales annually. This consolidated private label operation would have tremendous scale advantages in production, distribution, and marketing.
The combined operational footprint would be equally impressive. The merged company would operate more than 5,000 stores across 48 states, serving approximately 85 million households. Perhaps most significantly for private label development, the combined entity would run 50 manufacturing facilities dedicated specifically to producing store brand items. This vertical integration would give the merged company exceptional control over supply chains and production costs.
However, the path to merger approval faces significant regulatory hurdles. To address antitrust concerns, Kroger and Albertsons have proposed divesting 413 stores and several private label brands to C&S Wholesale Grocers. These divestitures represent an attempt to maintain competitive balance in markets where the merger would otherwise create concerning levels of consolidation.
Rodney McMullen, Kroger’s CEO, has emphasized the consumer benefits of the merger, particularly its potential to improve affordability and expand access to fresh food. Critics, however, question whether the combined entity might use its increased market power to raise prices over time, particularly in markets with reduced competition. The food industry consolidation trend continues to raise important questions about market competition and consumer choice.
Reshaping the Grocery Landscape
If approved, the Kroger-Albertsons merger would dramatically alter the competitive landscape of American grocery retail. The combined company would immediately become the second-largest grocer in the United States, claiming approximately 13.5% market share, positioning it just behind Walmart but ahead of regional powerhouses and specialized retailers. This scale would provide significant leverage in negotiations with suppliers and manufacturers.
The expanded private label portfolio, combined with advanced customer data analytics from both companies, would create powerful advantages. The merged entity could more precisely target product development to emerging consumer trends and regional preferences. This data-driven approach to market growth strategies would likely accelerate private label innovation and potentially reshape entire categories.
For CPG manufacturers and smaller grocers, the consolidation presents both challenges and opportunities. National brands may face increased pressure to differentiate their offerings and justify premium pricing as the merged company’s private labels continue to gain consumer trust. Smaller grocers without robust private label programs might struggle to compete on both price and exclusivity.
The broader trend toward private label growth shows no signs of slowing. Private labels now account for 24% of total units sold across major product sectors, reflecting strong consumer interest in cost-effective, high-quality store brands. Whether as separate companies or a merged entity, Kroger and Albertsons are clearly betting that private label innovation will remain a cornerstone of their competitive strategy for years to come.