The Growing Role Of Private Brands Across Walmart
The U.S. economic environment may be filled with uncertainties, but Walmart officials are confident that the retailer’s strategy, which includes growing its broad selection of private label products, will allow it to successfully navigate the expected choppy waters ahead.
During its recent meeting with the investment community, Doug McMillon, CEO of Walmart, said that while the nation’s largest retailer is not immune from some of the effects of the current economic climate, he feels the company is in a position to play offense.
“Nothing about the current environment impacts our confidence in our business or our strategy,” he said. “The changes we’re making add even more strength and flexibility for our future.”
During 2024, Walmart generated annual top-line growth of more than 5% with adjusted operating income growth of nearly 10%. E-commerce also continues to expand, with annual growth of more than 20% that boosted total e-commerce sales to 18% of the company’s total net sales.
Additionally, the retailer also continues investing in its owned brands, with the notable highlight being the launch of its bettergoods brand in food. Today, 21 Walmart U.S. private brands each have more than $1 billion in sales, with five accounting for $5 billion in sales each. Walmart currently offers products to shoppers under a total of 90 owned brands.
Launched in the spring of 2024, the initial bettergoods assortment of about 300 products touched a host of categories, including frozen, dairy, snacks, beverages, pasta, soups, coffee, chocolate, and more, with most items priced at less than $5.
Latriece Watkins, Walmart's chief merchant...
“Our goal with private brands is to offer customers the same or better quality at a lower price, and we’ve worked to modernize the brands across our portfolio.”
“Our goal with private brands is to offer customers the same or better quality at a lower price, and we’ve worked to modernize the brands across our portfolio,” said Latriece Watkins, executive vice president and chief merchandising officer with Walmart U.S. “Like our first new food private brand in 20 years, bettergoods. Bettergoods offers exciting flavors and culinary profiles that are uniquely crafted by Walmart product developers.”
While the bettergoods launch grabbed the headlines a year ago, Walmart was also busy modernizing its existing owned brands. The No Boundaries brand, launched in 1994, accounts for $2 billion in sales, but Watkins felt that despite driving a large volume of product, it lacked cohesion.
“No Boundaries now has a dedicated design team with years of experience in creating products for the Gen Z customer and has been transformed into a cohesive collection of on-trend items,” she said. “No Boundaries, along with our elevated brand collections in fashion, including Free Assembly and Scoop, have been highly additive to establishing Walmart as a fashion destination for all ages. Private brands are important to customers, so they’re important to us.”
Private label is also a vital component of the growth at Sam’s Club. Chris Nicholas, the warehouse club’s CEO, said the retailer’s Member’s Mark own brand over the past two years represents about 50% of the retailer’s merchandise sales growth.
“We believe Member’s Mark sets the standard in our clubs for quality, through disruptive value and on-trend innovation for items across all of our categories,” he said. By this summer, all of our Member’s Mark items will be free from artificial colors and ingredients, which we know is important for many members.”
He continued, “I’m really proud of how Member’s Mark is leading our better for you initiative with items like the Member’s Mark organic fruit twists made with real fruit and no artificial colors or flavors, and the Member’s Mark apparel sandwash collection made with 50% recyclable materials.”
Member’s Mark has also played a vital role in strengthening the connection between Sam’s Club and its shoppers.
In 2024, the retailer raised the curtain on an initiative to increase the level of engagement with shoppers and give a larger number of members a voice in the products that will eventually be in stores.
The retailer’s Member’s Mark Community, an opt-in network, allows participants to vote on exclusive flavors and test and trial new items. Company officials said the continuous flow of feedback is the cornerstone for guiding the large-scale development of products to ensure new items align with members’ needs and preferences.
Other highlights from Walmart’s investor meeting include:
• Expanded delivery catchment to be able to deliver food, general merchandise, and prescriptions to 93% of the U.S. in less than three hours.
• Accelerated growth of membership across formats, with Sam’s Club and Walmart+ membership benefits expanding and renewals advancing higher.
• Investments in price, with more than 30,000 items priced lower through the company’s rollback program.
• Renovated 1,930 stores and clubs, and built 373 more; invested $22 billion in CAPEX annually, including $19 billion in the U.S.
