Walmart’s private brands on the upswing
Walmart’s Steve Bratspies said the retailer’s private brands program has come a long way, but it still has a way to go.
Bratspies, Walmart’s executive vice president and chief merchandising officer, spoke at the Barclays Global Consumer Staples Conference Sept. 4 in Boston. He answered questions from Karen Short, an analyst with Barclays Capital.
Bratspies, who began at Walmart in 2005 and assumed his current role in 2015, said he didn’t think the Bentonville, Ark.-based retailer did a good job of running its private label program until the retailer began operating the program “with the same discipline that a branded manufacturer would.” He said Walmart now thinks about product quality, pricing, packaging and promotion, display, sourcing and driving innovation the way a branded manufacturer does.
“We’ve built that capability in-house,” Bratspies added. “And it's made a huge difference in our business in our ability to go to market.”
Walmart customers have responded, and they are buying more of the retailer’s private brands, he added.
“It's not only the grocery side of the house, but it's in the general merchandise side of the house,” Bratspies added. “We just re-launched three new apparel brands this year, which are making a difference in our business. We've had great success back in sporting goods with Ozark Trail and Hyper Tough in the hardware business. So we've got great private brands. We're managing them much better than we have in the past.”
But there’s still work to be done, Bratspies said.
“We've come a long way,” he added. “We made a huge difference, but there's a long way to go. And I think we can get a lot better. I think we've got work to do on consistency of quality. I think our quality has moved, but we can go and we'll find a product that we're not happy with all the time.”
Bratspies said millennials are more receptive to private brands than the generations before them, which has helped Walmart build its private brands program with them.
“But I would tell you they're receptive to private brands because private brand offerings out there — not only ours but even competitors — are just better than they used to be in the past,” he noted.