The chain has launched a new low-price, in-house brand to compete for bargain hunters who’ve been finding cheaper stuff on Amazon and at Target. The company also wants to expand its private label business, which is more profitable for Bed Bath & Beyond than selling third-party brands.
The company has said that in the past it had overlooked so-called opening price points — or the cheapest items in a product category — and was losing out on customers as a result.
Simply Essential is designed to fill that gap and help Bed Beth & Beyond appeal to shoppers looking for the lowest prices in areas such as kitchen utensils, where around half of the market is made up of such prices, according to the company.
“Bed Bath & Beyond had zero assortment in that opening price point [for kitchen utensils]. So we’re giving away the customer in 50% of the total market penetration,” CEO Mark Tritton said at an investor conference last month. Tritton, a former Target executive, took over as CEO in late 2019.
Cristina Fernandez, a retail analyst at Telsey Advisory Group, said the chain is working to improve customers’ perceptions of its prices against competitors.
Simply Essential is Bed Bath & Beyond’s third private label brand to launch this year. The company will launch at least five more by next year and plans to increase its private label brand sales to 30% of total sales, up from around 10% today.