Less than a year after its launch, Kroger's budget-priced line Smart Way was the fastest-growing private label brand in the second quarter, according to a new report from Numerator.

Kroger announced Smart Way last September at the same time the grocer said that it restructured its opening price point strategy in private label, narrowing its 17 brands down to two.

Smart Way’s household penetration grew 4.5 percentage points year-over-year in Q2, Numerator found. While it’s unclear how much of that growth is due to the brand being new, Numerator’s findings indicate that consumers are connecting with value-focused store brands with lower prices, with Amazon Basics and Aldi-brand items as the second and third fastest-growing private brands for Q2, behind Smart Way.

Earlier this year, Kroger was among several grocers and retailers, including Sprouts Farmers Market and Dollar Tree, that told investors in earnings calls that they plan to expand their store brands as private label resonates with consumers battered by high inflation.

Kroger CEO Rodney McMullen told investors on Dec. 1 that 2 million households had already bought Smart Way products: “These products are meeting the needs of our customers on a budget.” In June, Kroger CFO Gary Millerchip told investors that Smart Way has enhanced the grocer’s “overall brand architecture.” 

Kroger’s strategy to focus on budget-friendly private labels — Smart Way and Heritage Farms, its budget store line for fresh and dairy items — could be helping compete with mass retailers and discounters. While Walmart and Costco remain the private-label leaders across Numerator’s tracked retailers in the omnichannel and brick-and-mortar channels, Kroger has the second-highest share behind Walmart in the e-commerce channel, per the Numerator report.

Walmart brands still remain the most popular. In an analysis of the top 15 brands by household penetration in Q2, Walmart dominated the top five spots with Great Value (72%), Equate (53.1%), Marketside (46.8%), Freshness Guaranteed (41.4%) and Walmart (32.7%), per Numerator. Dollar Tree came in at sixth place, followed by Costco’s Kirkland Signature brand and Kroger’s namesake brand in seventh and eighth place, respectively. 

As grocers look to appeal to consumers interested in store brands as lower-priced alternatives to name brands, quality and meeting consumer expectations remain key components. Wegmans recently decided to discontinue its store-brand sodas because the products contain aspartame and high fructose corn syrup — “two artificial ingredients that do not meet our Food You Feel Good About requirements,” a spokesperson for the grocer confirmed in an email to Grocery Dive.

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Food recalls mount for Trader Joe’s

The grocer expanded a recall for Texas Tamale Company Gourmet Black Bean Tamales that might have undeclared milk to a ninth state late last week, adding to a growing string of alerts about food issues the company has sent out in recent weeks. In July, Trader Joe’s recalled products including multigrain crackers that might be contaminated with metal, falafel that could contain rocks and broccoli cheddar soup potentially laced with insects.

Kroger, drug company join forces to improve rural healthcare

The supermarket chain has partnered with Bayer in a bid to stamp out “care deserts” — areas significantly impacted by food insecurity and limited healthcare access — in sparsely populated parts of the U.S. Through a program called “Take Care, Now,” the companies plan to support training for 50 local nurses through the AgriSafe Network, which focuses on the healthcare needs of farmers and their families, according to a Monday press release.

Bayer and Kroger will also draw attention to the importance of addressing rural healthcare needs at events including concerts by country music star Luke Bryan and the Kroger Wellness Festival. In addition, the pharmaceutical giant is helping to cover the cost of providing 1 million meals to people facing food insecurity through the Feeding America network.

Just Walk Out arrives on Maryland college campus

Amazon and Grubhub are working together to bring an extra measure of convenience to college students who want to grab a snack while racing to class. The delivery company, which helps hundreds of educational institutions run their dining programs, has added Amazon’s frictionless shopping system, Just Walk Out, to a campus c-store at Loyola University Maryland. The arrangement, announced Tuesday, makes the Baltimore school the first Grubhub-partnered campus to create a store using Amazon’s computer vision-based technology.

Number of the week: 5.7%

That was Walmart’s share advantage in the online grocery space during the second quarter, according to a recent report from Brick Meets Click and Mercatus. Walmart also accounted for nearly 36% of all U.S. online grocery sales in the second quarter — a record high for the mass retailer.  

What’s ahead

Kroger earnings

The grocer announced plans to host its second-quarter 2023 earnings conference call next Friday, during which the company will comment on its latest financial and operational results. 

Impulse find 

Can you open food in the grocery store and eat it whilst shopping? A recent TikTok video has sparked this debate among consumers.

“I also opened this in-store. I’m sorry I was so hungry,” a customer said to a grocery store cashier, handing the employee an empty sushi container to be rung up. In the video’s caption, the creator argued that opening food in the grocery store is a normal behavior — but viewers debated this. 

Some defended the creator, crediting her for paying for the item, while others called it embarrassing. The video has received more than 6.5 million views and has been a topic of discussion in recent news articles. No grocer has commented on the creator’s actions, leaving the debate on eating in the grocery store wide open. 

@cecilybauchmann OPENING FOOD IS A NORMAL THING AT THE GROCERY STORE K?????✨#relatablemom #relatablemomlife #groceryshopping #groceryhaul #grocerystore ♬ original sound - Cecily Bauchmann