Walmart looks beyond Great Value

The discounter is honing its private label strategy with new products, an expanded assortment and a new price-fighter brand

During a recent episode of Pressure Cooker, a reality cooking show on W Network, Simon and Heather faced off to make a cod and polenta dish.

Seeking inspiration, Simon went to the Great Value Pantry, named after show sponsor Walmart’s private-label brand. Selecting some spices, he finished his dish with flair, and won.

Walmart hopes Canadians find similar inspiration in its burgeoning line of private label foods. These include the mid-tier Great Value line, the higher-end Our Finest, plus a new budget line, Price First. Walmart is keen to grow those brands.

“We see an opportunity and we’re focused on the quality of our products,” says Sandra Farwell, VP of brand management and private label. A new product development kitchen was recently added to company HQ in Mississauga, Ont. Product developers are on staff and can tap into other Walmarts (such as Asda in Britain) for private-label expertise.

This past Christmas, Walmart launched a program for Our Finest centred on gift giving. Thirty new SKUs hit shelves, including its Premium Belgian Biscuit Collection.

A series of lemon-themed items, including ice cream and cookies, came out this past summer. The Luscious Lemon Cookie, Farwell says, was to be an “in and out,” but became a bestseller.

Walmart is also expanding its fresh line, Your Fresh Market. Launched in bakery, in 2012, it’s now been added to deli, meals to go, meat and produce.

Price First is a Canada–U.S. initiative. The brand hit shelves this past summer with 20 SKUs in paper products, cereal and dressings, with another 80 on the way in the next few months. Great Value, meanwhile, is getting an upgrade with more colour and better photos on its packages. Some items have also been reformulated.

Walmart likes what it sees so far. Sales of store brands are up “double digits” in 2014, says Farwell. Great Value, the largest brand at 1,900 SKUs, is up 16% alone.

Tom Stephens, head of Brand Strategy Consultants, thinks Walmart’s multi-tier approach is wise, but says it should avoid creating confusion with too many store brands in a category. “How can a consumer tell the difference between three levels of mayonnaise?”

A recent visit to a Walmart in Vaughan, Ont., found little such overlap. An exception, perhaps, was ranch dressing, where two private labels in 475-ml bottles competed: Price First for $1.27 and Great Value for $1.42. Kraft Rancher’s Choice stood nearby at $1.97 for the same size.

Canadians like store brands. Seventy-three per cent say they’re a good alternative to name brands, says Nielsen. But market share is stagnant at 18.4% in dollars. Consumers are buying name brands on sale instead.

It’s not for retailers’ lack of trying. PC’s “black label” line came out in 2011. When Target arrived in 2013, it brought its Market Pantry and Archer Farms brands. Giant Tiger has Giant Value.

A private label’s goals, says Product Development Plus’ Scott

Lindsay, should include enhancing store loyalty “so shoppers will drive by other stores to visit yours.” In that regard, Walmart’s private labels have no shortage of competitors.

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