Private Label Buyer

Walmart Restores Thousands of Products, Increases Competition for Private Label

August 24, 2010

Walmart’s efforts to rationalize its SKU base apparently didn’t work out the way the company expected. The consequence of that will be the reappearance of some previously dropped national brand name products – and more competition for Walmart store brand offerings as a result.

Bill Simon, formerly COO, took over as president and CEO of the company’s U.S. operations this summer. While not explicitly repudiating his predecessor’s strategy, Simon indicated in prepared remarks during as Aug. 17 earnings call that the store was replacing items cut through “Project Impact,” which based supplier decisions on factors other than just consumer appeal.

“We also engaged with suppliers to review our assortment to make sure that we had the breadth of inventory that Walmart customers have come to expect. In the coming weeks and months, our assortment will be more relevant to our customers, with the right mix of new and innovative products. We are leveraging our suppliers’ capabilities to help us drive impactful features. And we are restoring thousands of products to our assortment and adding new items. We plan to win in every category and let customers decide through their purchase decisions what to include in our assortment,” Simon says.

“Our store managers now have more autonomy to make decisions on what’s right for their customers. We believe it will take some time to see significant changes in comp sales, but we are beginning to see more encouraging traffic trends,” he says.

Walmart Stores Inc. reported a total sales increase of nearly three percent for the quarter ended July 31, with net income increasing 3.6 percent.  Yet total U.S. sales growth was flat, with same-store sales within U.S. Walmart stores falling near two percent.