PL Buyer: Walmart’s Great Value Lineup – The Art of Transformation
Through a special
arrangement, what follows is a summary of a current article from Private
Label Buyer, presented here for discussion.
Walmart’s betting on a revamped Great Value
lineup — and many other strategic changes — to keep the momentum going
In a March press release detailing the Great
Value expansion and enhancement, Walmart said it worked with several hundred
suppliers and product testing facilities to measure more than 5,250 products
up against leading national brands. The goal? To ensure Great Value quality
is equal to or better than that of these brands. It also said it changed
the formulas for 750 items — including breakfast cereal, cookies, yogurt,
laundry detergent and paper towels — and had plans to introduce more than
80 new products ranging from thin-crust pizza to organic cage-free eggs.
Walmart said back then that the new and improved
Great Value products — complete with new packaging — would begin appearing
on shelves in March, with the majority of products hitting stores by the
end of May.
Jack Sinclair, Walmart U.S.’s executive vice president,
grocery merchandise, told attendees to the retailer’s June 5 analyst meeting
that the Great Value revamp is about providing the consumer with an alternative
to, not a replacement for, the national brands.
“We’re putting a very professional team in place
who can bring products that are very clear, very well-formulated products,
very well-represented products,” he said, “but we’re very much about trying
to sell brands for less and providing great values and choices within that
Stephen Quinn, Walmart U.S.’s executive vice
president and chief marketing officer, added, “I think what we’re doing is
providing a better offering than we have in the past to that customer so
that customer doesn’t have to supplement their national brands by going to
Combined, the improved product quality and the
price advantage over the national brands bode well for current economic times,
says Jim Hertel, managing partner with Willard Bishop.
“I think it’s absolutely the right thing for
them to be doing at this point in time,” he said, “and I think that there
should be a lot of apprehension, perhaps, on the national brand side about
what it’s going to take for shoppers [to come back] once good times return.”
Although testing and altering formulas to improve
quality and unifying the packaging were both “huge steps in the right direction,” Scott
Creamer, president of The Screamer Co. advertising agency, says a downside
is the packaging’s generic feel.
“That translates into a perception of low quality,” he
adds. “The all-white backgrounds and product photography have no personality,
style or intrigue. The generic feel is going to have a hard time holding
up in a post-recession economy.”
Doron Levy, president of Captus Business Consulting,
maintains that Walmart is still using the old model for private label, simply
mimicking the national brands, which he says just won’t cut it today. Overall,
even the low-price promise might not be enough of a draw for today’s discriminating
shoppers, Mr. Levy added, especially because many supermarkets’ store brands
also are very price competitive.
“If they can buy a generic ketchup that looks
better and has a better brand at Kroger, the shopper’s going to do that,” he
said. “I think what’s really the key to success in private label now is to
come up with products that don’t even compete with the national brand.”
What do you think about Walmart’s revamp of its Great Value private
label line? How would you rate the Great Value name, the packaging,
and the its overall positioning versus national brands? Do you consider
Great Value a significant threat to national brands?