Walmart announced Tuesday that it is bringing to shelves a new grocery label called Bettergoods — the largest private grocery brand the retailer has launched in two decades.
The move could help Walmart retain higher-income shoppers who flock to the retailer during times of higher inflation by filling Walmart’s grocery shelves with 300 new products tailored to vegan, gluten-free and adventurous diet options.
Bettergoods has three focuses: plant-based products like oat milk ice cream for $3.44, culinary treats like bronze cut noodles for $1.97 or jalapeño soup for under $4, and manufactured foods like gluten-free products.
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Bettergoods will introduce shoppers to “new and exciting flavors and concepts,” Walmart wrote in a press release. This differentiates the brand from Walmart’s existing Great Value line, which focuses on everyday staples and is the largest privately held grocery brand in the country by sales.
Walmart differentiates Bettergoods from competing brands because many of the brand’s items are “completely unique to Walmart,” the press release says. Competitor Target launched its own grocery label, Good & Gather, in 2019, focusing on everyday items rather than individual items.
Most Bettergoods items cost less than $5, with prices ranging from $2 to $15.
Photo credit: Walmart
Walmart has a significant grocery business, accounting for over half, or 60%, of its total U.S. sales. Last year, Walmart was the country’s largest grocer by sales, ahead of Kroger and Costco.
Rising inflation may have driven shoppers to Walmart for cheaper groceries — and Bettergoods could be Walmart’s way to keep them loyal with higher-quality, trendy goods.
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Scott Morris, senior vice president of private label, grocery and consumer products at Walmart US, told CNBC that Walmart expects Bettergoods to appeal to the higher-income, younger shoppers who have started shopping at its stores in recent years.
Morris said Walmart began working on the new brand after shoppers said they wanted “elevated culinary, inspirational items” and healthier options.
A March report from the U.S. Bureau of Labor Statistics shows that food prices increased year-over-year in some categories, with prices for meat, poultry, fish and eggs rising 0.9% over the year, while prices for fruits and vegetables rose 2%.
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Walmart is closing health clinics
Walmart also announced Tuesday that it would close another part of its business, Walmart Health.
The retailer is closing all of its U.S. health clinics, 51 locations across the U.S., and discontinuing its telehealth service.
Walmart said low profits in its health center business forced the company to make the “difficult decision.”
“The challenging reimbursement environment and increasing operating costs are resulting in a lack of profitability that makes the care business unsustainable for us at this time,” the company said in a press release.