Will going low lift up Bed Bath & Beyond’s sales and profits?
Bed Bath & Beyond has launched Simply Essential, an owned brand line of 1,200 bed, bath, home, kitchen and dining, and storage and organization items sold at entry level price points.
The chain, which has produced an impressive turnaround under CEO Mark Tritton since he joined the company in November 2019, has nevertheless failed to compete against a wide variety of rivals ranging from Amazon.com to Walmart in the lower price tier of categories where Simply Essential will be positioned.
CNN reports that Mr. Tritton told attendees at an investor conference last month that the retailer had “zero assortment” of kitchen utensils at the low price end of the category. “We’re giving away the customer in 50 percent of the total market,” he said.
All the SKUs in the Simply Essential line are priced for customers looking for value without big cash outlays. Kitchen basics start at $1 and pillows at $5. No item in the entire line is above $200 and many are under $50. The products can be purchased in stores or online and are available for pickup (in-store and curbside) and delivery (regular or same-day).
“Of all the owned brands that Bed Bath & Beyond will launch this year, Simply Essential represents the largest new product assortment and is intended to attract new customer segments for us,” Joe Hartsig, executive vice president and chief merchandising officer for the retailer, said in a statement.
The launch of Simply Essential follows the recent debuts of Bed Bath & Beyond’s Nestwell and Haven brands. The chain rolled out Nestwell in March, a line of nearly 1,200 high quality bed and bath products at affordable prices. Haven, which it introduced in April, is a line of spa-inspired bath products.
Simply Essential represents the third of eight owned brand lines that Bed Bath & Beyond has said it will roll out by the end of February 2022. The retailer, under Mr. Tritton, is looking to boost owned brands from around 10 percent of revenues when he took over, to around 30 percent within three years. If done successfully, the moves should not only create a point of difference for the chain among its rivals but also lift gross margins in the process.
- Bed Bath & Beyond Launches Expansive New Product Assortment At Opening Price Points With Simply Essential – Bed Bath & Beyond
- Bed Bath & Beyond has a plan to stop losing bargain hunters to Amazon and Target – CNN
- Will Bed Bath & Beyond’s store brand overhaul elevate the chain’s fortunes? – RetailWire
DISCUSSION QUESTIONS: Will the addition of the Simply Essential owned brand line open up a new customer base for Bed Bath & Beyond and help it gain market share? What is your take on the retailer’s approach to its owned brand portfolio?