Walmart is introducing a new grocery brand called BetterGoods to retain the customers it has attracted during a period of high inflation. The private label will offer trendier and chef-driven foods priced at less than $5. With nearly 60% of the company’s U.S. sales coming from its grocery business, Walmart’s large food business has helped drive store and online traffic, especially as customers face budget constraints due to inflation. In the most recent fiscal year, Walmart’s net sales for groceries in the U.S. rose almost 7% year over year to $264.2 billion.
As shoppers seek new flavors and lower prices, Walmart and other grocers have seen an opportunity to grow their private label business. National brands faced shortages during the Covid-19 pandemic, prompting customers to turn to store brands, which are often cheaper. Additionally, competitive low-priced grocery chains like Aldi, Lidl, and Trader Joe’s, along with the popularity of Costco’s Kirkland brand, have shifted customers’ views of store brands. Grocers have evolved their private label strategies by introducing more unique, high-quality food items rather than basic or copied products.
Retailers like Target have launched new grocery brands such as Good & Gather and Favorite Day with a range of items like salad kits, peanut butter spreads, and creative ice cream bars. Kroger introduced Smart Way two years ago, offering low-priced basics like mayonnaise and bread. Walmart’s BetterGoods brand will feature products across categories like frozen foods, dairy, and snacks priced under $2 to under $15, focusing on culinary flair, plant-based options, and items without certain ingredients. The brand will complement Walmart’s existing private brands, including the popular Great Value brand.
The shift towards private label brands in the grocery industry reflects changing consumer preferences for affordable, high-quality products. With inflation pushing food and housing prices up, more shoppers are turning to store brands for better value. Walmart’s decision to introduce BetterGoods aligns with this trend and aims to offer customers trendy, chef-driven foods at affordable prices. The company’s strong position as the country’s largest grocer by revenue gives it an advantage in capturing a larger share of the private label market.
Walmart’s move to launch BetterGoods is part of a broader trend among grocers to expand and improve their private label offerings. By offering unique and high-quality products at competitive prices, retailers are better positioned to attract and retain customers in the face of rising inflation and increased competition. This shift towards private labels signals a changing landscape in the grocery industry, where store brands are gaining traction and reshaping consumer perceptions of quality and affordability. Walmart’s new private brand BetterGoods is poised to capture a share of this growing market by offering a wide range of trendy, affordable food options.
