When prices for essential groceries soared in 2021 and 2022, some Americans who did not regularly shop at Walmart increasingly turned to the retailer known for its low prices. Now the company is trying to retain new customers and attract others with a new selection of plant-based, gluten-free and gourmet dishes.
On Tuesday, the retailer unveiled a new store brand that it says will “make high-quality food easily accessible.” Executives described the Better Goods brand as its largest foray into the private label food business in 20 years.
Better Goods items include frozen appetizers such as oat milk frozen desserts, plant-based macaroni and cheese, chicken curry empanadas and Brie Phyllo Blossoms. More than 70% of the products will be priced under $5, the retailer said.
“All of our research shows that customers expect these types of products,” said Scott Morris, Walmart’s senior vice president of commercial food and consumer brands. “They expect these premium ingredients and products that we offer, and they are also looking for healthier options.”
The retailer said its store brands are growing across shoppers of all demographics, especially Generation Z, a group that includes people born in the late 1990s and early 2000s.
Analysts want to see if the retailer can retain higher-income individuals who have started shopping at Walmart over the past few years as inflation eases. The company is taking a number of steps to make itself more attractive to customers. Walmart announced plans to open new stores and remodel existing stores. They also changed signage, displays and other visual offerings in ways that analysts say make stores more attractive to wealthy shoppers.
Walmart executives said they are not marketing Better Goods specifically to high-income consumers, but acknowledged that the line could appeal to those shoppers.
“We didn’t necessarily have to target a specific demographic,” Mr. Morris said on a call with reporters. “But we also know that it can appeal to certain demographics in certain ways. So we see this as an opportunity to make every customer even more loyal to Walmart by giving them new choices, new inspiration and new products across our stores and digital experiences.”
Walmart also has other store brands, some of which have been around for years. Mr. Morris said the company has $14 billion worth of brands, eight of which are in grocery stores. Introduced over 30 years ago, the Great Value brand covers a wide range of food items. The company said some Better Goods products may be similar to Great Value items, but it's not worried the brands will compete with each other.
“We don’t see this as an erosion of our core values,” Morris said. “In fact, we see this as very gradual.”
Some of the new private-brand foods are already sold in Walmart stores and online, and most will be on the market by the end of the year, the company said.