retail news in context, analysis with attitude

Advertising Age reports that “after de-emphasizing private label for more than a year, Wal-Mart Stores is looking to ramp up its program by adding package-goods marketing talent, and the move could present a substantial new challenge to marketers who rely on the world's biggest retailer as the economy worsens … But it's not clear a new push by Wal-Mart into premium private label can succeed. Some package-goods marketers noted that having good prices on national brands is key to the retailer's core value proposition, as price comparisons among individual retailer private brands carry little or no weight.”

The story notes that Walmart is looking for a senior executive to oversee its private label brand strategy, and is ramping up the hiring for its private label division.

KC's View:
While Walmart’s central value proposition focuses on low prices for national brands, there is no question in my mind that a strong private label program that emphasizes both quality and value can succeed in specific categories, especially in current economic trends continue.

And they will continue, make no mistake. Most of the analysts I hear and read keep saying that even if the stock market reverses itself and starts to climb, that doesn’t mean that the so-called “real economy” is improving appreciably.

It would be foolish to suggest that Walmart cannot be successful with an own label strategy that has worked for companies such as Trader Joe’s and Costco. If it develops a strategy that is c0hesive and consistent, Walmart could turn this into an enormous success story.