Walmart Launches New High-End Food Brand to Attract Wealthy Young People

Walmart, as the largest grocery retailer in the United States, is expanding its food empire by introducing a new line of premium food own-brand products called Bettergoods this year. The aim is to attract new customers with higher income and encourage existing customers to increase their spending.

Scott Morris, Vice President of Private Brands, Food, and Consumables at Walmart USA, told CNBC that Bettergoods is designed for all customers, but is expected to particularly appeal to young, affluent shoppers as it offers “inspiring gourmet products” favored by them, and features more healthy plant-based items.

This new brand has been developed over several years and includes products such as cardamom rose raspberry jam (priced at $5.24) and curry chicken meat roll-ups. Walmart plans to add over 300 different Bettergoods products to the shelves this year, with many items priced at $5 or below.

According to The Wall Street Journal, Denise Wright, Vice President of Private Brands, Food, at Walmart USA mentioned that in order to generate new ideas, the team dined at hundreds of restaurants around the world, ranging from fast-food chains to high-end dining establishments.

Wright said, “These trips sound like fun, but they are tough because we have to eat eight meals a day.”

For the retail giant, this is a significant strategic bet as it competes with Costco Wholesale, Trader Joe’s, and Amazon’s Whole Foods division for customers. Amid rising inflation, these companies also have extensive store brands. At the same time, this is part of Walmart’s ongoing efforts to attract customers to its stores.

Data from Circana, a company tracking consumer goods sales, shows that approximately 26% of total sales in the food and beverage sector last year were from private brands, compared to 25% in 2022.

Walmart already has one of America’s largest food and consumables brands: Great Value. These products are usually modestly packaged, offering everything from butter to toilet paper. With around 4,000 products similar to national brand offerings but at lower prices.

Morris mentioned that Great Value is becoming an important part of Walmart’s business, but Bettergoods is aimed at attracting more customers and increasing shopping frequency for Walmart.

Nearly 60% of Walmart’s annual sales in the United States come from grocery products. In the most recent fiscal year ending in late January, Walmart’s net sales of groceries in the United States increased by nearly 7%, reaching $264.2 billion. However, senior officials at Walmart state that national brands will always be an important part of their selection.

Morris also said that approximately 200 products under Sam’s Choice will switch to Great Value or Bettergoods, or will be discontinued.

Meanwhile, Walmart is cutting back on investments elsewhere. The company announced on Tuesday that it will be closing all 51 clinics opened in the past 5 years.

These clinics are typically located adjacent to stores and provide primary healthcare services and telehealth appointments. Walmart stated on Tuesday that the continuously rising operating costs and challenging financial environment have made their care business unsustainable.