Walmart’s Jet.com site to launch its own line of groceries

September 28, 2017

By Lisa Fickenscher | New York Post

Walmart’s e-commerce site Jet.com, looking to better compete on price with archrival Amazon.com, is preparing to launch a private-label brand, The Post has learned.

The brand, whose name could not be learned, is expected to be launched in roughly 60 days across dozens of food and household items categories, sources said.

Lower-priced private-label brands have become a battleground of late, with Amazon buying Whole Foods this summer, gaining access to the chain’s private-label brand, and German discount chains Aldi and Lidl expanding rapidly across the country — largely on the strength of their private-label groceries.

In response, Walmart is leaning on its online ace, Jet.com, which it bought last year for $3 billion, to beef up its digital presence.

The Jet.com private-label merchandise “will be better quality than many of the national name brands,” said retail consultant Burt Flickinger, who is familiar with the company’s plans.

Earlier this year, Walmart began selling its private-label brands — Great Value, Equate and Sam’s Choice — on Jet.com. But industry experts say the brands are not popular with Jet.com’s younger customers.

“Walmart is where consumers go to buy branded products for less, but everyone is getting into private label now, and Walmart has to elevate its offerings,” said Steve Johnson, of Foodservice Solutions.

The Jet.com private-label products will be sold exclusively on the site for the first year and will later sell on Walmart.com. They might one day find their way into Walmart stores, said a source familiar with the plan.

A big focus will be on breakfast cereals, which have risen in price more quickly than most grocery items, say experts.

While the big packaged food companies, including Kraft, Mondelez International and Campbell’s, compete with private-label brands, they welcome Jet.com’s initiative because it tempers Amazon’s leverage, say industry experts.

“The branded vendors are privately telling us that they are relieved about the Jet.com division becoming a big private-label seller,” said Flickinger. “They see Jet.com as the best opportunity to slow Amazon’s march towards making unreasonable demands in its procurement.”