- Wal-Mart sees Great Value and its other private label brands as opportunities for future success as national brands extend their reach through e-tailers like Amazon, according to Supermarket News.
- The retailer plans to leverage its private label lines to bolster store loyalty, and seeks to improve its sourcing and quality to boost profit margins. This strategy may be key to competing with incoming Lidl stores, Wal-Mart president and CEPO Doug McMillon told Supermarket News. These stores, coming to the U.S. later this year, offer deep discounts and an array of premium private label offerings.
- Wal-Mart is also refining its click-and-collect grocery operations, which have expanded to 600 store locations, in an effort to make them more efficient at the store level.
Store brand sales reached an all-time high of $118.4 billion last year, registering a record 17.7% of the total market, according to the Private Label Manufacturers Association’s 2016 Private Label Yearbook.
Wal-Mart is just one of many retailers looking to differentiate themselves from competitors as a way to develop customer loyalty. Numerous analysts agree that demographics and market share play a role in consumer trust, but that the quality and variety of private label brands are also a driving factor.
By putting an emphasis on its private label brands, Wal-Mart is showing its customers that it is moving beyond simply offering deep discount generics, and will instead roll out cost-competitive products that can also beat out the quality of national brands.
This top-notch quality, combined with the added convenience of click-and-collect, can help the retailer expand its consumer base and encourage long-time shoppers to keep coming back — a two-pronged approach that could help stave off encroaching retailers like Lidl.