Walmart looking to private label for growth

Walmart is taking a page from the Kroger playbook and revamping its private brands with trendy, premium products such as Unicorn Sparkle ice cream.

Jack Pestello, senior vice president of food and consumables for Walmart's U.S. operations, tells the Arkansas Democrat Gazette that the company has decided about to "get really serious about private brands." The retailer has had brands such as Great Value, Equate and Marketside for years, "but we had some gaps," he said. "So we made it a core pillar of our strategy to say we are going to have a solid private brand program at Walmart because it's really core to helping people save money and live better," he said.

Pestello told the Democrat Gazette that shoppers still buy name brands and compare prices of brands between stores, but customer data showed Walmart was losing some customers to competitors "because we didn't have a good private brand offering."

According to the Democrat Gazette, Walmart's new strategy to rectify this included the creation of a 12,000-square-foot facility in which to test and tweak food products for its private brands. The Culinary and Innovation Center, on the west side of the main headquarters building on Walmart's campus, opened in 2016 and gathers product developers, suppliers, buyers and packaging designers under one roof.

Walmart also beefed up its team that works on private brands, Pestello told the Democrat Gazette, going from "a very small base" to more than 100 people. "The majority of the team is solely responsible for going out and finding awesome products, finding suppliers who can make those awesome products for us, make sure we're driving cost inefficiencies out of the supply chain," while still creating a quality product and a consistent experience for customers, he said.

Read the Arkansas Democrat Gazette article here.