Wal-Mart Stores Inc. is expanding its private-label line of food and household cleaners to take advantage of recession-pinched consumers' increasing desire to buy cheaper store brands rather than more expensive brand-name products.

The retailing giant's retooled version of its Great Value brand, first introduced in 1993, will start hitting U.S. store shelves by the end of this month, the company announced Monday. The line includes more than 5,200 items, including 80 new ones, such as teriyaki beef jerky and fat-free caramel-swirl ice cream.
Wal-Mart's move comes as sales of grocery-store house brands have grown briskly in the U.S. Last year, sales of private-label food and other consumer products jumped 10% to $82.9 billion, from $75 billion in 2007, according to the Private Label Manufacturers Association, citing data from Nielsen Co. Sales of branded products increased just 2.8%.
But Wal-Mart's sales of house brands, as a percentage of total revenue, have lagged its rivals'. Last week, U.S. grocer Kroger Co. said 27% of its fourth-quarter revenues came from private brands; analysts estimate that Wal-Mart's private-label products account for about 16% of its overall food sales.
Wal-Mart is retooling and expanding its Great Value private-label brand. To close that gap, Wal-Mart says it has improved about 750 of its Great Value offerings, from chocolate-chip cookies to laundry detergent. It is also making the Great Value label more prominent on packages.
Private label products help retailers keep the prices of national brands in check by offering less expensive competition. National grocery chains are pressuring manufacturers to reduce prices more quickly now that fuel and other commodity costs have fallen from their peak last summer.
(Source: The Wall Street Journal)