People talk outside a Walmart Pickup grocery store in Bentonville, Arkansas.
Rick Wilking | Reuters
walmart Discounters are debuting new grocery brands in a bid to retain the shoppers they attracted during a time of high inflation.
On Tuesday, the retail giant announced it is rolling out a private label called BetterGoods, which features more on-trend and chef-driven foods. Most items cost less than $5.
Walmart is already the nation's largest grocery store by sales. In the most recent fiscal year, nearly 60% of the company's sales in the U.S. came from its grocery business.
Walmart's large food business has helped drive traffic to its stores and online, especially as customers focus on discretionary spending during periods of high inflation. And its reputation for low prices is helping the company attract higher-income grocery shoppers as budgets tighten due to inflation.
In its most recent fiscal year, which ended in January, Walmart's net U.S. grocery sales rose nearly 7% from a year earlier to $264.2 billion.
An employee restocks frozen food at a Walmart store in Burbank, California.
Patrick T. Fallon | Bloomberg | Getty Images
But Walmart, like other grocers, sees room to grow its private label business as shoppers seek new flavors and lower prices. During the coronavirus pandemic, some national brands were out of stock in stores, and customers began buying retailers' own brands.
Then, as inflation drove up food and housing prices, more shoppers tried cheaper store brands. Additionally, the growth of low-priced grocery chains such as Aldi, Lidl, and Trader Joe's (which have given prominence to their own brands rather than national brands) and the popularity of Costco's Kirkland brand have changed customer perceptions of store brands. .
Grocery stores are also overhauling their private label approach. Rather than relying on basic items like canned peas or imitations like low-priced boxes of Cheerios-like cereal to make up their store brands, retailers have begun debuting more unique food products. I did.
for example, the goal launched a new grocery brand in 2019 called Good & Gather, with a wide range of products including bagged salad kits, peanut butter spread, and frozen vegetables. Another of his grocery brands the company debuted, Favorite Day, consists of creative takes on his ice cream bars and trail mix.
Other retailers are debuting new private labels in grocery aisles with an emphasis on affordability and fending off discounters like Aldi and Dollar General. krogerFor example, launched Smart Way two years ago. This brand offers basic products such as mayonnaise and bread at low prices.
Walmart's new grocery brand, Better Goods, consists of products in a variety of categories ranging from under $2 to under $15, including frozen foods, dairy products and snacks. According to the company, these products fall into one of three main areas. Plant-based products (like pint oatmilk non-dairy frozen desserts). Or products that exclude certain ingredients, such as gluten-free and antibiotic-free chicken nuggets.
The new private label will join Walmart's existing private label collection in its grocery division, according to market research firm Numerator. That includes Great Value, the country's largest private grocery brand by sales.
