NEW YORK — Walgreen Co. said Thursday it is replacing its older store-brand products with a single new brand called Nice, and it is aiming for $1 billion in annual sales of those products.
The Nice brand will replace a group of other store brands like W, Café W, and Deerfield Farms. The company said it is making the change because it wants to have one identifiable store brand for household items and food.
The Deerfield, Ill., company said it plans to have 400 products bearing that label on its shelves by early 2012 and will continue to add new products after that. The company expects to reach $1 billion in annual sales of Nice items within 18 months to two years.
Walgreen is the largest U.S. drugstore chain, and has about 7,700 locations across the country. It gets about 20 percent of its non-pharmacy revenue from sales of store-brand products, and it expects sales of Nice items to surpass sales of the brands it is replacing.
The company said Thursday that more than 20 Nice products are on the shelves, and it will start a national marketing campaign to support the brand later in 2011.
The products will be in most of its stores by early 2012. Walgreen said they will cost up to 30 percent less than national brands.
Retailers like store brands because strong ones can lure in shoppers looking to save money, and they tend to be more profitable for stores to sell than major national brands.
The company has long been selling household products like paper plates, plastic utensils, and toilet paper, and foods including healthy and salted snacks, spices, and some frozen and refrigerated foods.
Walgreen said new Nice brand products will include soups, sauces, and bakery items. It also plans to sell more fresh and frozen groceries, staple foods like rice and oatmeal, macaroni and cheese, coffee, and coffee creamer, part of a more general expansion into food.
The company will keep Walgreen’s store brand for pharmaceuticals, along with its Petshoppe pet supply brand, its beauty brand, and the DR Delish line of foods in its Duane Reade drugstores. It said Nice will be its second-largest brand after Walgreen’s.
Shares of Walgreen fell $1.08, or 3 percent, to $35.06 as the broader market declined sharply.