We look at the key reasons why Albertsons is launching a new private label, Signature, across its store estate.
Signature as an umbrella brand
The new Signature brand will be launched across Albertsons’ almost 3,000 store strong estate and all 18 banners. Covering almost 4,000 items, the Signature umbrella brand will be a multi-category brand covering fresh, grocery and consumable product categories. Different brands will be used across six different product sectors; Signature Select, Signature Kitchens, Signature Farms, Signature Café, Signature Home and Signature Care.
Driving economies of scale across the business
In essence, these new brands replace a number of former Safeway brands such as Safeway Farms, in fresh produce, Safeway Kitchens, in bakery, and Safeway Signature, its premium private brand. Through launching these brands as non-banner specific brands it enables Albertsons to utilise them across its entire, multi-banner, store estate. This will provide it with a range of scale economies across sourcing, new product development, packaging and marketing.
Building on Safeway’s private brands leadership
It’s no surprise that Albertsons is drawing on Safeway’s former brands, given the retailer’s leadership in the US in the private label space. While it was not the reason why Albertsons acquired the Safeway business, it was one of the strengths it was looking to exploit and apply across its existing operations. Albertsons’ former private brands have been transitioning to this new brand since last year. A number of products trading under the Culinary Circle private label, a brand which it was supplied with through Supervalu, have already converted to the Signature Select brand.
Boosting the performance of private brands outside of the Safeway stores
However, while Safeway Select was very much a premium-tier product range, Safeway Farms and Safeway Kitchens were positioned more as brand equivalent products. This new launch could see the Signature brand play a different role across different categories, or see the retailer launch more added-value products within the fresh categories. The move will likely lift the performance of private brands outside of the Safeway bannered stores, although it will be important that the transition is well communicated within the Safeway stores, given the high level of loyalty to the former brands.
| Stewart Samuel, Program Director, IGD Canada|
Based in Canada, Stewart heads up all of IGD's research and coverage on Albertsons. He is also responsible for shaping IGD's research program across North America. Contact Stewart at [email protected] for further insight on the region.