Sam's Club Receives Positive Feedback on New Brands

August 18, 2011
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Bentonville, Ark.-based retailer Walmart announced during its second quarter earnings conference call this Wednesday that its partner company Sam’s Club has received positive feedback from consumers on its new private label brands.


“Since the beginning of the year, we have introduced three new brands, Artisan fresh in deli and bakery, Simply Right in baby and health and beauty aids and Daily Chef in frozen foods and refrigerated products. These new brands represent close to 100 items this month, with plans to roll out 400 more by the end of the first quarter next year,” says Brian Cornell, chief executive officer of Sam’s Club.


While Sam’s Club may be doing well with its new private labels, analysts agree that parent Walmart still  has work to be done. “Walmart aggressively speaks to being a ‘house of brands’ and does not want to promote its brands in a preferential way to national brands. They let consumers decide, all driven by everyday low prices. I don't think we'll see PL specific promotion,” explains Neil Stern, senior partner with the Chicago, Ill.-based research firm McMillan Doolittle LLP.


Other experts agree. “Walmart’s private label program is clearly not working very well. I think the company is still getting over its Project Impact debacle, where it jettisoned national brands for unproven private label product, and customers revolted,” says Paula Rosenblum, managing partner at Miami-based Retail Systems Research (RSR).


“It’s a little complicated to be the low price leader and also have private label, but the truth is other supermarkets are managing. Publix doesn’t have a high-priced image and yet the company has managed to also create a private label story,” she explains.


Walmart reported a 12.4 percent increase in earnings during this sales quarter.


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