Kroger will launch a mass media campaign to get its new branding in front of consumers.
Kroger is getting a new look with a fresh logo and a universal slogan it plans to use across all of its brands.
The grocery chain, which also owns Ralphs, Fry’s, Harris Teeter, Fred Meyer, and more than a dozen other banners that sell food and home goods, announced Wednesday its new tagline is “Fresh for Everyone.” Previously, it didn’t have one.
It says it will launch a mass media campaign, including in stores, on TV, radio, social media, podcasts and billboards, using its new branding. It also says, to celebrate the launch, it will offer shoppers free grocery pickup through Jan. 1. Normally, there is a $4.95 fee.
The company declined to break out how much it will spend on the rollout and advertising blitz but said Kroger has always had a “fairly significant marketing and media budget.”
“We found fresh is a real point of difference for us,” Kroger’s vice president of marketing, Mandy Rassi, told CNBC in an interview. She said the changes have been in the works for more than a year.
“We are not changing the names on the [individual] banners,” Rassi explained. “That said, there is a benefit that comes with scale … with a broader narrative.”
The announcement comes one day after the grocery company held an investor meeting in New York, giving 2020 profit and comparable sales expectations ahead of analysts’ estimates. Its shares shot up more than 11% on the news. Kroger’s stock, which has a market value of $22.3 billion, has climbed about 1.3% since the start of the year. Shares have been under pressure since Amazon said in June 2017 that it would acquire Whole Foods.
During the meeting, Kroger said it has benefited from making modern upgrades in stores, adding more delivery options and investing in price cuts.
Kroger says the animated “Kroji” characters included in new marketing materials are meant to keep Kroger “fun.”
Next year, Kroger says it plans to spend between $3.2 billion and $3.4 billion on similar investments, with a portion of that devoted to the opening of its first Ocado delivery facility in 2021. It’s also testing smaller-footprint stores in urban markets like Atlanta.
Just about two years ago, Kroger unveiled its “Restock Kroger” investment strategy, which is finally showing signs of paying off. The company’s fiscal 2020 outlook is upbeat, with its forecast for adjusted earnings of $2.30 to $2.40 per share coming in above analysts’ estimates of $2.30 per share. Same-store sales are expected to accelerate to more than 2.25%. In 2019, sales at stores open at least a year grew between 2.0% and 2.25%.
“The retail industry is changing really rapidly,” Kroger’s Rassi said. “Branding and brands in general are playing a more critical role in our industry. … It clarifies to customers who you are and what you stand for.”
Kroger’s biggest competitors in grocery today include Walmart and Amazon, which have fared better with investors. Walmart shares are up more than 27% this year, while Amazon‘s stock has climbed over 20%. Both companies dwarf Kroger’s market value. Walmart has a market cap of $338 billion, while Amazon is valued at $894 billion.