Kroger (KR) to Launch Private-Label Apparel in Fall 2018

Executive Summary

• Kroger, the largest US grocery chain, announced plans to launch its own fashion brand in the fall of 2018. The line will offer apparel, including basics and fashion pieces, for children, teens and adults, and feature a modern, casual aesthetic.
• Through the initiative, Kroger is aiming to diversify its revenue stream and attract more footfall to its stores. Traditional grocery chains are facing cutthroat competition from various retail formats and Amazon’s acquisition of Whole Foods Market in August 2017 has intensified competition in US food retailing.
• Apparel retailing in the US is just as competitive as grocery, and Kroger’s private-label apparel will face steep competition from numerous established and growing value players. Kroger will compete most closely with mass merchants Walmart and Target as well as with Amazon.