Albertsons is launching its own private label as stores compete to offer better value.
The supermarket giant, which owns Safeway and Vons supermarkets, announced the launch of its Overjoyed brand on Wednesday.
With the new label, Albertson is venturing into the price war. In doing so, the brand joins brands such as Walmart, which uses its popular private label to profile itself as budget-friendly.
German discounter Aldi has become the fastest growing supermarket in the US thanks to its own brand.
But a retail analyst told DailyMail.com that Albertsons is taking a different approach than its competitors: focusing on treats rather than basic necessities.
Overjoyed includes a range of sweets, including cupcakes, cookies, cheesecakes, mixes and toppings, the company said.
Albertsons said it hopes shoppers will be enticed by “indulgences” such as French macarons, s’mores trail mix and chocolate fudge brownie ice cream cake
Customers are increasingly looking for value for money when doing their weekly shop, after years of food inflation severely impacted family budgets.
Neil Saunders, head of retail at GlobalData, told DM.com: ‘More and more customers are turning to private label in an attempt to save money on their groceries, and Albertsons is capitalizing on that trend.
‘It’s interesting that the retailer is focusing on treats and indulgences, as people in this category often buy branded products.
“But as Target has shown with its own Favorite Day house brand, which focuses on treats, there’s a big opportunity here.”
Albertsons hopes customers will be enticed by “delicious treats” such as French macarons, s’mores mix and chocolate fudge brownie ice cream cake.
“For customers who want to create their own desserts, Overjoyed offers playful fairytale princesses or dinosaur and shark sprinkles, colorful cupcake liners, and decadent chocolate chip and marshmallow sprinkles, to name a few,” Brandon Brown, senior vice president of private brands for Albertsons, said Wednesday.
Part of the house brand, Overjoyed Boutique, also offers vases, candles and seasonal gifts.
Albertsons is the nation’s third-largest supermarket chain, with more than 2,200 stores across 34 states.
This comes as Albertsons remains involved in an ongoing antitrust lawsuit brought by the Federal Trade Commission.
The FTC is trying to block the acquisition of Albertsons by supermarket chain Kroger’s.
The agency and several states argue that the planned $24.6 billion acquisition would eliminate competition and thus undermine price controls.
Kroger has argued that its planned acquisition of Albertsons would actually lead to lower grocery prices because it would allow the company to compete with conglomerates like Amazon and Walmart.
Customers were outraged after testimony in the case revealed that Kroger had raised prices above inflation despite budgets being stretched to the limit.
The supermarket chain’s top price manager testified in court last month that the store had raised prices on milk and eggs more than required.
“For milk and eggs, retail inflation is significantly higher than cost inflation,” CEO Andy Groff wrote in an email to his bosses in March.
“Greedflation is real,” one Kroger customer wrote on X in response to Groff’s admission.
Albertsons’ Overjoyed includes a range of sweet treats, including cupcakes, cookies, cheesecakes, mixes and toppings
‘I have noticed that prices are increasing more than in any other store [than Kroger’s]“Now we know why,” another noted.
Others said they would boycott the store because of the unnecessary price increases.
“Absolutely disgusting,” wrote one X user. “I have never been to a Kroger and no matter where I go in my life I will never go again.”
If the merger goes through, the two chains have said they plan to sell about 600 stores together, in an effort to appease regulators.
The two chains have offered to sell 579 stores in markets where they overlap to C&S Wholesale Grocers, a supplier and operator of supermarkets in New Hampshire, for $2.9 billion.
The states with the highest number of stores affected are Washington with 124, Arizona 101, Colorado 91 and California 63.