Private Label Buyer Blog

Could Walmart Be Positioning For New Value Tier?

December 4, 2012

With the current revamping of packaging on a host of Great Value products at Walmart, the days of a dominant private label with plain white packaging could be on the way out at Walmart.

Or are they?

As it stands, Walmart is upgrading its packaging on a host of food and nonfood items, but not all. Planet Retail analyst Natalie Berg said last week that the company might be picking and choosing categories that it wants to upgrade the products in, positioning them more as national brand equivalents.

But if that’s the case, could the remaining categories, with the plain white packaging, potentially become a new value tier private label?

Not likely, said Jefferies & Co. analyst Dan Binder.

“I would be surprised if they did that,” he said. “That’s not the messaging we’re getting from them. They’d much rather partner with the branded guys at really awesome prices. … The message is, we’re a house of brands, and we’ll tweak our private label to fill the void.”

That said, Binder was impressed with the initial changes to the packaging – if for no other reason than it got away from the white boxes.

“I thought (white packaging) was terrible for food items,” he said. “It’s not so bad for commodity stuff though.”

Wisner Marketing Group President Jim Wisner had similar feelings about Great Value, saying Walmart positioned the brand between a first and second label, hurt by the “look and feel of neogeneric.

“Some items are first some, some items are not,” he added. “Their process on how they define quality and make decisions is a bit curious. They understand OTC, and they deviated from that when they got in the food products. There’s not a rationale for how they deviate (from current policy). They would need to fix all of that first to be credible with (a new value tier).”

But Binder said don’t be deceived by the initial appearance of changes in some categories but not all. A wholesale Great Value revamp may be in the works.

“Who says they’re done?” he asked.



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