Walmart Eyeing Revamp of Produce Merchandising

Walmart is planning to amp up its fresh food merchandising under a new initiative officials are calling “Produce 2.0.”

Although specific details remain scarce, Steve Bratspies, Walmart’s U.S. chief merchandising officer, said the retailer plans to inform its store managers about the initiative at a meeting in Indianapolis later this month.

Speaking in an interview this week at Barclays Global Consumer Conference in New York, Bratspies said the new produce sets would build on previous improvements the company had made in sourcing, assortment and receiving that have helped to raise the quality and freshness of produce items at Walmart stores.

Progress in fresh food has been a major element of the retailer’s recent U.S. sales momentum, but Bratspies said he feels merchandising can add more to that.

“We think there’s a lot of opportunity in front of us,” Bratspies said, “and we don’t think we’re as good as we need to be.”

Bratspies said Produce 2.0 would be “a lot about visual set and experience inside the store that the customer will see directly,” but was reluctant to divulge much more than that. “I gave out too much details,” he said, according to a Sentieo transcript. “I haven’t even talked to our store managers about it yet so I don’t want to go too far.”

The company did not immediately respond to WGB’s request for additional details.

Bratspies described improving fresh produce as “a journey, not a destination.”

“You never actually get there and there’s always things you can do to improve, and we’re continuing to work on all those things,” he said. “But we’re starting to see some momentum in the business. We like where we are and working that with Produce 2.0, which we’re going to talk to our managers about. We’re going to go even further.”

Private label is another area of the business Walmart has improved upon in recent years, Bratspies said.

“In the past, in my opinion, we didn't do a particularly good job of running what was then private label,” Bratspies said. Today, however, the company is “running our brands with the same discipline that a branded manufacturer would run,” including quality, pricing, packaging and promotion, he said.

“All the things that a traditional branded manufacturer does, we built that capability in-house, and it’s made a huge difference in our ability to go to market, and the customers are responding to it,” Bratspies said. "They’re choosing it more and more.”

In combination with improved fresh departments, a broader assortment and competitive prices, private label is providing Walmart with an edge against hard discounters such as Aldi.

“We’re very focused on making sure that we’re sitting right with [hard discounters] on price and taking away the reason for a customer to choose a discounter or a hard discounter vs. Walmart particularly,” he said. “So we’ve negated the price gap and then we offer a much broader assortment, a full produce, all the different services we have in our store. We like that model matched up against a hard discounter, but you have to have that price right on private brands to do it, and you have to have a really good fresh produce department.”