Walmart’s new private label brand, bettergoods, offers low-cost trendy groceries that appeal to budget-conscious and higher-income shoppers.
Walmart’s new grocery private brand, Bettergoods, leverages the retailer’s reputation for low prices but also aims to appeal to consumers across income brackets.
Bettergoods debuted last month and has items ranging from $2 to under $15 across grocery categories. Seventy percent are priced under $5, Walmart President and CEO Doug McMillon told investors during an earnings call on Thursday.
Like the offerings found at Trader Joe’s or Target, Walmart’s better brand aims to combine low prices with stand-out product attributes. When announcing the brand, Walmart said it zeroed in on three key areas: culinary experiences, plant-based, and “made without.”
“The brand focuses on today’s trends and premium quality. … This is the type of quality and value that will resonate with customers across income spectrums,” McMillon said.
So far, that seems to be working, according to research from Numerator. By analyzing purchase data of Bettergoods items and survey data based on 200 receipt-verified purchasers of the brand, the firm found that Bettergoods appeals to consumers across income groups.
The numerator found that low-income and high-income homes are 34% and 20% more likely to purchase better goods compared to Walmart’s Great Value private label shoppers, respectively. The firm said its findings suggest that Bettergoods appeals to lower-income consumers who want to treat themselves while giving higher-income consumers a product that goes beyond base needs at an affordable price.
Among surveyed shoppers of Bettergoods ice cream, 40% had annual incomes below $40,000, while nearly 33% had incomes between $40,000 and $125,000. Twenty-seven percent made more than $125,000.
“Compared to its Great Value counterpart, the demographics of Walmart’s better ice cream buyers indicate a younger, more naturals-focused consumer who has dietary restrictions and cares about price and flavor,” Numerator said, noting that around a third of consumers purchased better ice cream based on its nutritional facts.
The line includes ice cream and 300 items in categories such as frozen, dairy, snacks, beverages, pasta, soups, coffee, and chocolate.
“Bettergoods allows consumers who have purchased Great Value to trade up and spend more within Walmart’s private brand portfolio overall at the expense of extra volume, which benefits Walmart’s margins,” the report added.
According to Numerator, during the 12-month period that ended with the close of this year’s first quarter, more than a quarter (26.4%) of Walmart’s total grocery sales were from its private label offerings.
The retailer said private brand penetration in grocery increased during the first quarter of its fiscal year 2025.
“While private brand penetration is in the low 20s as a percent of sales, more than half of all customer grocery baskets over the last year had a private brand in them,” Walmart CFO John David Rainey told investors during the earnings call.
Bettergoods marks the retailer’s largest food private brand launch in 20 years, McMillon told investors.
Walmart’s effort to beef up its food private label portfolio comes as the retailer grows its grocery sales even as inflation rates decline. As restaurant traffic falls, grocers and mass retailers are swooping in with low-priced offerings to help consumers find easy and affordable meal solutions.
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In an interview with CNBC, Rainey said that the high price of fast food has spurred more shoppers to head to the retailer’s grocery aisles. “It’s roughly 4.3 times more expensive to eat out than it is to eat at home,” he told the news outlet. “And that’s benefiting our business.”
