Walmart‘s largest private label, Great Value, is getting a makeover.
Starting in May, the brand’s nearly 10,000 items, ranging from LED light bulbs to gallons of milk and frozen chicken nuggets, will be sold in new packaging, the company announced Wednesday. Walmart first launched the brand in 1993 and hasn’t changed its look in over a decade. The price and products contained in the new packaging will remain the same.
Shoppers will see Great Value’s more modern and colorful packaging, starting with snacks, followed by cereals, cream cheeses and sour cream products. It will take about 18 to 24 months for each product to receive new packaging, said Scott Morris, senior vice president of private brands at Walmart US.
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 the five largest private label brands in terms of household penetration in the United States belong to Walmart, which is also the country’s largest grocer by annual revenue.
Walmart’s Great Value brand is getting a makeover. Starting this spring, shoppers will see more modern and colorful packaging.
Courtesy of Walmart
Still, Walmart’s overhaul of Great Value is an offensive play as more companies improve the quality of their internal products. Amazon’s grocery brand has become the fastest-growing private label in terms of unit volume year-over-year since its launch in October, according to Numerator. Some retailers, such as Costco and Trader Joe’s, have attracted customers because of their reputation for low-cost, high-quality private label groceries and wine, among other products. And Aldi, a retailer that almost exclusively carries its own brands, is expanding its national presence by opening more than 180 stores in the United States this year.
Additionally, the redesign coincides with Walmart’s significant gains among customers with annual household incomes above $100,000. It appeals to wealthier buyers by offering not only lower prices, but also faster deliveries and more unique and stylish merchandise. For example, it added more chef-crafted flavors, plant-based items and on-trend ingredients to Bettergoods, a private-label grocery line launched about two years ago.
In an interview with CNBC, David Hartman, vice president of creative at Walmart, said customer research indicated that shoppers liked the quality and price of the products, but “felt like the brand expression on the packaging was kind of lagging behind.”
“What they felt was a sense that it was a compromise,” he said. “They love the product, whether it’s food or consumables, but they don’t feel particularly proud to display it in their home or family.”
The packaging for Walmart’s Great Value items, like its Coffee Donut Shop, has a colorful, more modern look.
The new packaging looks more colorful and sharper 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 store aisles or on the Walmart app, Hartman said.
Clearer, more concise packaging will also help Walmart’s pickers, who move quickly as they retrieve items from shelves for customers’ online orders, Morris said.
Morris said the company needs to meet demand for private brands that don’t have the look, taste or feel of cheaper knockoffs of national brands.
“Ultimately, the customer continues to expect more from private labels,” he said.
In the United States, the market share of private labels has increased. They hold about 20% of the overall 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. Still, he says, it’s a notable increase from 15 percent in the United States a decade ago.
He added that Generation Z shoppers – the younger customers retailers now seek – have pushed private labels further because they buy the products more than previous generations and often prefer them to well-known national brands.
“The stigma is gradually disappearing,” 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 entertain.”