Walmart rolls out higher-quality line under new private label

Oat milk blueberry swirl ice cream. Bronze-cut pasta from Italy. Chicken curry empanadas. Hot honey seasoning. Each for under $6.

Doubling down on its private-label offerings, Walmart announced on Tuesday a rollout of more than 300 new products under the brand Bettergoods. The fresh label is an answer to consumers’ demand for higher-quality products at affordable prices as they continue to struggle with soaring grocery bills, company executives said.

“Walmart’s private brands have seen strong growth over the last several years, in particular through the pandemic and the inflationary times,” Scott Morris, senior vice president of private brands, food and consumables for Walmart U.S., said in a press call. Bettergoods is “an elevated experience in taste, flavor and variety that is accessible to all of our customers.”

The debut is the largest the Bentonville, Ark.-based retailer has staged in two decades and the quickest turnaround in company history, Morris said. Through the rest of the year, Walmart shoppers will see new products in about 15 categories that keep up with the latest food trends and are plant-based and gluten free, as well as“cleaner” foods made without artificial flavors, colorings or added sugars, Morris said. The items range from about $2 to $15, with more than 70 percent of them under $5.

Grocery prices have surged 21 percent over the past four years, outpacing theoverall inflation rateof 18 percent during the same period. For many shoppers, private-label brands are an attractive option to cut their grocery expenses. And financially strained consumers are more willing to break with habits to save a few dollars on essentials.

“The moment your consumers like them, you’ve actually sort of tied them to you because it creates something unique that they can only find on your shelves,” said Katrijn Gielens, a marketing professor at the University of North Carolina.

Many retailers have already capitalized on the trend, Gielens said. Aldi and Lidl, Germany-based value grocery chains specializing in private-label products, expanded rapidly during the pandemic. Aldi, one of the fastest-growing grocers in the United States, plans to add 800 stores through 2028.

Walmart similarly saw growth during the pandemic, having scooped up and held onto new and younger shoppers looking for value. The nation’s largest retailer also made strides with higher-income shoppers. During its final quarter last year, customers from households that make more than $100,000 a year drove sales in almost every category, Walmart’s chief financial officer, John David Rainey, told investors in February.

Walmart already has 14 private-label brands, eight of which fall in the food and consumables categories. Great Value is by far its most successful - the brand is the largest consumer packaged brand across the category in the United States, Morris said.

While Bettergoods will have some overlap in aisles that sell Great Value, it’s intended to serve a different purpose: It’s a higher tier of pricing, reflecting its use of higher-end ingredients, and “features items that are new to the market” that don’t directly compete with national brands, said Denise Wright, vice president of private brands food for Walmart U.S.

With the new brand, Walmart hopes to continue to keep its new customers engaged - specifically younger shoppers, who aren’t especially brand-loyal.

“All of our research tells us that the customer expects these types of goods,” Morris said. “They expect to have these elevated ingredients and offerings that we provide, and they also are looking for those healthier options.”

And now is the time for investment, Gielens said.

“With inflation still lingering, this is the moment to push your private labels to the full,” she said. “Because this is a time that people are more inclined to try them, and once you try them, repeat quite often follows.”