In this article, learn about:
What private label brands are
The benefits of private label brands
Walmart’s strategy for private brands
What is a Private Label Brand?
Private label brands (or own-label brands) are products that retailers sell under their own branding, even though they are manufactured by a third party. In other words, private label brands allow retailers to offer exclusive products without handling the manufacturing process.
For manufacturers, private label production ensures a steady revenue stream, while retailers gain control over branding, pricing, and customer experience. These brands often deliver high-quality products at a lower cost than national brands, making them an attractive option for consumers. Additionally, private branding eliminates the need for retailers to invest in large-scale production facilities, specialized supply chains, or extensive quality control operations.
By leveraging external manufacturing, retailers can offer a diverse range of private label products that appeal to both budget-conscious shoppers and premium buyers. Walmart’s private label brands, such as Great Value and Bettergoods, exemplify this strategy, providing customers with affordable, high-quality alternatives to name brands.
Why Private Label Brands Are Thriving
Private label brands have evolved from simple cost-saving alternatives to high-quality, sought-after products. Initially, they were marketed as budget-friendly options, but today’s consumers actively seek them out for value and quality. According to a recent report:
In 2024, store brand sales reached a record $271 billion
Private label sales increased 3.9% in 2024 compared to 2023
Private label sales growth outpaced national brands, which saw only a 1% year-over-year increase in 2024
Retailers have responded by expanding their private label offerings, and investing in premium categories like organic foods, sustainable products, and high-end fashion. Private label brands are now a key part of retail strategy, helping businesses differentiate themselves in a crowded marketplace.
The Benefits of Private Label Brands
Private label brands offer several key benefits to retailers, manufacturers, and consumers:
Higher Profit Margins – By sourcing products directly from third-party manufacturers, retailers can secure better pricing and increase profit margins.
Quality Assurance – Many private label products are made by the same manufacturers that produce national brands, ensuring high-quality standards.
Lower Consumer Costs – Private label products are often more affordable than national brands, making them attractive to budget-conscious shoppers.
Reduced Marketing Expenses – Since these products carry the retailer’s branding, there’s less need for extensive advertising and promotional efforts.
Cost Savings in Bulk Purchasing – Retailers, especially supermarkets, can lower costs even further by ordering private label goods in large quantities.
Walmart’s Private Label Strategy
Walmart has heavily invested in private label brands, solidifying its position as a leader in the retail industry. The company introduced its private-label dog food brand, Ol’ Roy, in 1983, quickly becoming a best-seller. Since then, Walmart has expanded its private label offerings across various categories, providing high-quality, affordable alternatives to national brands. From groceries to apparel, Walmart continues to be a go-to destination for consumers seeking cost-effective yet premium products.
In recent years, Walmart has also aimed to attract higher-income shoppers and strengthen its e-commerce presence. In 2019, it introduced MoDRN, a premium home and furniture brand designed exclusively for online shoppers. Walmart also revived Scoop, a once-iconic fashion label, as its in-house private label brand.
Most recently, Walmart launched Bettergoods, a private brand focused on delivering elevated culinary experiences at an affordable price. The Bettergoods line emphasizes high-quality ingredients, modern flavors, and accessibility, reflecting Walmart’s commitment to providing affordable, high-quality options for its customers.
Private label brands allow Walmart to reduce overhead costs, build customer loyalty, and offer a curated shopping experience. With a mix of affordability, quality, and exclusivity, Walmart’s private label strategy continues to shape the retail landscape, proving that store-brand products can be just as desirable—if not more—than national brands.
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