By Siddharth Cavale
NEW YORK (Reuters) - Walmart (NYSE:WMT) debuted a new private-label food brand on Tuesday, with most of the products priced under $5, as it aims to improve and grow its offerings at a time when rival retailers are expanding their own lines.
The world's largest retailer said it would sell a variety of dairy products, snacks, beverages, pasta, soups, coffee, chocolate and other food items across 50 categories under the new brand "bettergoods."
Items will be priced from under $2 to under $15, with 70% of the 300 products on offer falling below the $5 mark, Walmart said in a statement.
Among the products offered are a below $3 hot honey seasoning, a line of jar soups under $4, and bronze cut pasta from Italy priced at $1.97. Walmart has also included healthier plant-based food options such as an oat milk non-dairy frozen dessert priced at $3.44 per pint.
While price was top of mind, customers had also been asking for an elevated food experience, said Scott Morris, Walmart's senior vice president, private brands, food and consumables. This customer demand led to the fastest-ever product development and launch of a brand by the retailer, he told reporters on a call.
Major competitors including Kroger (NYSE:KR) and Target are also aggressively bolstering their private-label food offerings.
Kroger said last month it planned to add more than 800 items to its "Our Brands" private-label products, while Target said it would add hundreds of new items to its "Good & Gather" and "Favorite Day" food brands. Like bettergoods, Good& Gather also sells most products under $5.
As inflation persists, increasing numbers of Americans are opting for private-label brands that are direct substitutes for national brands but at cheaper prices.
The cost of eating food at home in the U.S. is about 30% higher than in 2019 and the price gap between private label and branded goods is wider than average, leading to an acceleration of "value-seeking behaviors," according to a Jefferies analyst note published last month.
Private-label food brands gained volume share in 50 of the 75 food categories tracked by Jefferies in the four weeks to March 23, the note said. Cereal and granola bars, ketchup, mustard, and health and nutrition powder were among the categories with the largest gains, it added.