Walmart is redesigning its own brand with great value

WalmartGreat Value’s largest private label brand is getting a new look.

Starting in May, nearly 10,000 of the brand’s products, from LED lights to gallons of milk and frozen chicken nuggets, will hit shelves in new packaging, the company announced Wednesday. Walmart first launched its brand in 1993 and hasn’t changed its look in more than a decade. The price and products inside the new packaging will remain the same.

Shoppers will see the most modern, colorful packaging at great value starting with snacks, followed by cereals, cream cheese and sour cream products. It will take about 18 to 24 months for each product to get new packaging, said Scott Morris, senior vice president of private brands at Walmart U.S.

Great Value has higher household penetration than any other store-owned brand in the country, with 87% of U.S. households purchasing at least one item from the brand in the past year, according to market researcher Numerator. The company says all five of the top private-label brands in terms of household penetration in the U.S. belong to Walmart, which is also the nation’s largest grocery company by annual revenue.

However, Walmart’s overhaul of Great Value is an offensive play as more companies work to improve the quality of their internal products. Amazon’s grocery brand has become the fastest-growing private label by unit volume year-over-year since its launch in October, according to Numerator. Some retailers, e.g Costco and Trader Joe’s, customers because of their reputation for low-priced, high-quality private-label grocery and wine products, among many others. Aldi, a retailer that stocks almost exclusively its own brands, is expanding its national reach by opening more than 180 stores in the United States this year.

Additionally, the reform coincides with Walmart’s significant gains from customers with annual household incomes above $100,000. It attracted these affluent shoppers by offering not only lower prices, but also faster deliveries and more unique and stylish merchandise. For example, it added more chef-driven flavors, plant-based ingredients and trendy ingredients to Bettergoods, a specialty grocery line it launched about two years ago.

In an interview with CNBC, David Hartman, Walmart’s vice president of creative, said customer research indicated that shoppers liked the quality and price of the products, but they “felt that the brand expression on the packaging was kind of lagging behind.”

“What they felt was that it felt like a compromise,” he said. “They love the product across food and consumables, but they don’t feel very proud to display it in their homes or with their families.”

The new packaging looks hotter and purer than the previous version. Walmart chose the new design to make it easier for busy shoppers to find what they’re looking for, whether in the store’s aisles or on the Walmart app, Hartman said.

Morris said clearer, more concise packaging will also help Walmart pickers, who move quickly as they grab items from shelves for customers’ online orders.

Morris said the company needs to keep up with demand for private label brands that don’t look, taste or sound like cheaper imitations of national brands.

“The bottom line is that the customer still expects more from private label brands,” he said.

In the United States, the market share of private labels has increased. They hold roughly 20% of the total grocery market share in the U.S. compared to about 45% to 50% in Canada and Europe, according to Steve Zurek, NielsenIQ’s vice president of advanced analytics. However, he said this is a notable jump from about 15% about a decade ago in the United States

He added that Generation Z shoppers — the young customers that retailers are now chasing — have pushed private labels further because they are buying more products than previous generations and often prefer them over well-known national brands.

“The stigma is slowly starting to fade,” he said. “It’s almost a badge of honor in some ways, depending on the generation, to have a store brand sitting on the counter while you’re entertaining.”