Kroger 2011 Annual Report Download - page 61

Download and view the complete annual report

Please find page 61 of the 2011 Kroger annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 124

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124

A-6
ME R C H A N D I S I N G A N D MA N U F A C T U R I N G
Corporate brand products play an important role in the Company’s merchandising strategy. Our
supermarkets, on average, stock approximately 11,000 private label items. The Company’s corporate brand
products are produced and sold in three “tiers.” Private Selection is the premium quality brand designed to be
a unique item in a category or to meet or beat the “gourmet” or “upscale” brands. The “banner brand” (Kroger,
Ralphs, King Soopers, etc.), which represents the majority of the Company’s private label items, is designed to
satisfy customers with quality products. Before Kroger will carry a banner brand product we must be satisfied
that the product quality meets our customers’ expectations in taste and efficacy, and we guarantee it. Kroger
Value is the value brand, designed to deliver good quality at a very affordable price.
Approximately 40% of the corporate brand units sold are produced in the Company’s manufacturing
plants; the remaining corporate brand items are produced to the Company’s strict specifications by outside
manufacturers. The Company performs a “make or buy” analysis on corporate brand products and decisions
are based upon a comparison of market-based transfer prices versus open market purchases. As of January 28,
2012, the Company operated 39 manufacturing plants. These plants consisted of 17 dairies, 10 deli or bakery
plants, five grocery product plants, three beverage plants, two meat plants and two cheese plants.