What Are 'Pizzadillas' And Why Should Wal-Mart Investors Care?
Wal-Mart Stores, Inc. (NYSE: WMT) is gearing up for the next major battlefield and attract new customers with a major push into the private label segment.
Private label products, also known as store brands, are products that simply contain a stores own name or brand. It offers consumers the opportunity to save a few dollars versus the much larger national brand names, such as PepsiCo, Inc. (NYSE: PEP) or Kellogg Company (NYSE: K).
TheStreet's Brian Sozzi offered a first-hand glimpse at Wal-Mart's new initiatives in the private brand business at the same time that Amazon.com, Inc. (NASDAQ: AMZN) is working on its own similar business line.
According to Sozzi, sales of private-label products "have been hot" as consumers "continue to count their pennies." He added that over the past 2 years, sales of store brands rose 5 percent to $5.4 billion.
One of the private label items Wal-Mart will sell is "Pizzadilla" which is one-half pizza, one-half quesadilla. The box will contain Wal-Mart's brand name, 'Great Value.'
Sozzi was also shown Wal-Mart's private-label diapers and razors.
"According to a Walmart spokesman, private-label products help it offer lower-priced products to economically sensitive consumers," Sozzi noted. "Also, by cutting out the large national brands, the company could move quicker to introduce innovative products."
Another interesting product Wal-Mart plans to sell is its own craft beer which comes in a 12-pack for $13. The company already sells the beer but in roughly half of its 4,600 total U.S. store count.
A private-label prosecco wine is also in the works.
Finally, Sozzi also pointed out that Wal-Mart's warehouse chain Sam's Club will also be full of its own private-label products under its own Member's Mark moniker. In fact, the private brand is intended to attract a client base that boasts an annual income in the $75,000 to $100,000 range.
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