One would be surprised by what a box of frozen chicken and waffles under Walmart’s Great Value private-label brand signifies for the world’s largest retailer. Ditto a half pizza, half quesadilla product playfully called a ‘Pizzadilla’ that takes about 22 minutes to heat up in an oven. The rather eclectic new frozen foods offer a small snapshot into what’s likely to be a major private-label product push by Walmart this year across all of its store concepts. The push is so great the company decided to open its first-ever culinary innovation center in its Arkansas backyard as a way to incubate new ideas. Private-label products, otherwise known as store brands, are simply products on which stores put their own names or brands. They give retailers a way to set themselves apart from competitors. Consumers know they can buy a national brand such as Pepsi anywhere but they can only buy their favorite store brand at a certain store. Shoppers often love private labels because they tend to be cheaper in price relative to well-known national brands. Retailers love them as they often carry higher profit margins than national brands, which cost more for retailers to buy due to big-name companies such as Pepsi and General Mills passing along their product development and marketing expenditures. According to a Walmart spokesman, private-label products help it offer lower-priced products to economically sensitive consumers. Also, by cutting out the large national brands, the company could move quicker to introduce innovative products. Sales of private-label products have been hot as U.S. consumers continue to count their pennies post-Great Recession, which is likely spurring Walmart’s renewed efforts. According to Nielsen, total annual sales of store brands across supermarkets, drugstores and mass merchants rose by $2.2 billion to $118.4 billion last year, an all-time record. In the past two years alone, annual sales of store brands have increased 5%, or $5.4 billion, says Nielsen. TheStreet got its hands on several of Walmart’s zaniest new private frozen food creations to see if they stood up in quality and taste to other options for consumers such as cooking at home for the family or a trip to a McDonald’s drive-thru. TheStreet’s Brian Sozzi reports from New York.
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