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Wal-Mart Reformulating Store Brand's Great Value

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The Associated Press

The Tampa Tribune

Published: March 17, 2009

PORTLAND, Ore. - Wal-Mart is stepping up its effort to draw cost-conscious shoppers, promising that store-brand products from cereal to cookies will be tastier, smell better and look more attractive.

The world's largest retailer outlined plans Monday to reformulate hundreds of items in the Great Value store brand it says is the country's biggest food brand by sales and volume.

Wal-Mart, responding to the increasing popularity of store-brand products among cash-strapped consumers, also is introducing nearly 100 products such as fat-free caramel swirl ice cream and thin-crust pizza as it tries to compete with national brands.

"We don't feel we are messing with success; we are enhancing our success," said Andrea Thomas, Wal-Mart Stores' senior vice president of private brands.

The company also is introducing a consistent design to help shoppers identify products and has added elements such as labels in English and Spanish. It declined to disclose sales figures for the Great Value line, which includes household products.

Wal-Mart's move underscores the importance of lower-priced store-brand products and ups the ante in the competitive grocery industry.

The company's launch of some of its in-house products more than a decade ago put pressure on traditional grocers, said Brian Sharoff, president of the Private Label Manufacturers Association.

Grocers took notice and made their in-house brands - traditionally less expensive than national brands but once a blandly packaged and little-marketed product line - an integral part of their business.

The popularity of store brands has soared as the economy has tanked, with shoppers looking to stretch their dollars, especially as food prices increase.

The Private Label Manufacturers Association said a basket of 40 average store-brand products runs about 30 percent to 35 percent less than a basket of comparable national brands.

"Interest is as high among the public as it has probably ever been," said Matt Arnold, a consumer analyst at Edward Jones.

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