SCOTTSDALE, Ariz. — Efforts by Wal-Mart Stores to relaunch its Great Value corporate line do not mean national brands will get less shelf space, William S. Simon, executive vice president and chief marketing officer of Wal-Mart U.S., said here last week.
“We are a house of brands,” he told investors here during a field trip sponsored by Morgan Stanley, New York. “We've always been a house of brands — it used to say ‘brands for less’ on the side of the building — and we believe selling national-branded product is a very important driver that communicates value to our customer.
“We are relaunching Great Value because the opportunity to update the packaging and the product specs are there for us, and it's also a way for us to fill in holes and gaps where we may not have a national brand or we may not have a national brand where we believe, for whatever reason, we can get the best price in the market.
“It's an important initiative for us, but it will by no means overshadow or replace any national brands. Our customers prefer national brands.”
Once the updated Great Value lines begin appearing at Wal-Mart stores, their presence will be more pronounced “because the packaging is different,” Simon said. “But there are no plans to replace shelf space [for national brands] with space for Great Value products.”
In terms of fresh departments, Simon said the Bentonville, Ark.-based company has made operational changes over the last 12 to 18 months “that removed several days from the supply chain, with the obvious result of product that is closer to the fields by a couple of days.”
Wal-Mart also made changes in its replenishment methods in the produce area “that keeps product closer to the sell than we had in the past, which has resulted in a reduction in the throwaways in our produce sections, allowing us to have a better overall gross margin and letting us focus on sharper price points,” he said.
On another topic, Simon said Wal-Mart is continuing to focus on inventory reduction and effective inventory management after reducing inventory levels by 1.2% last year.
“We are hardly just-in-time. Our inventory is still north of 30 days in the stores, and we have entire markets that operate on 15 days. So we believe there is a big opportunity for us to continue to focus on [inventory reduction] while having effective, efficient operations and in-stock levels to serve our customers.”