Walmart Private Brands See Continued Growth

Private brand products continued to grow at Walmart in the first quarter as its customers alter their shopping behaviors in an effort to overcome high prices.

During the company’s first quarter conference call to discuss earnings, John David Rainey, executive vice president and chief financial officer, said private brand penetration at the retailer’s U.S. store continues to increase. In the first quarter, private brands were up 1.1%, following growth of 1.6% in the fourth quarter and 1.3% in the third quarter. 

“You’re seeing (private brand share) come up,” said Doug McMillon, Walmart’s CEO. “We have more influence over what's happening with private brands than we do with branded products.”

Officials did not share which product categories are seeing the greatest growth in private brands.

Across the store at Walmart’s U.S. locations, general merchandise sales declined mid-single digits, while food and consumable sales increased low double digits. Company officials noted that inflation in food and consumables was down more than 4% throughout the first quarter. However, prices remain high and customers are spending cautiously on discretionary categories, Walmart officials said.

As the retailer continues to navigate the challenging economic waters, its consolidated revenue in the first quarter was up 7.6% to $152.3 billion. Net sales in the U.S. were up 7.2% to $103.9 billion. Comparable store sales in Q1 were up 7.4%.

At Sam’s Club, a 6.3% rise in membership gave first quarter sales a boost to $20.5 billion, up from $19.6 billion in the comparable quarter the previous year. E-Commerce sales were up 19% and comparable store sales were up 7%.

The club’s Member’s Mark private brand product assortment continues to grow across the store, with a new apparel line slated to hit stores in the coming weeks. During a recent interview with the Store Brands Spotlight Podcast, Myron Frazier, SVP of Private Brands & Sourcing at Sam’s discussed the retailer’s success with private brands and the company’s future growth plans.