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As Walmart looks to broaden its grocery assortment, private brands are playing a major role, the company’s CFO said at a recent conference.
In particular, the company is seeing success with its Bettergoods grocery line, which launched last year and focuses on trendy and affordable items.
“Bettergoods has been a big success story for us,” John David Rainey, executive vice president and CFO of Walmart, said at the Oppenheimer Consumer Growth & E-Commerce Conference early this month, according to a Seeking Alpha transcript.
The brand features approximately 400 items and has racked up almost $500 million in sales, Rainey said, noting that roughly 70% of that brand’s items are priced below $5.
“What’s exciting to me about this is 40% of the customers that buy a Bettergood[s] item are coming back as repeat customers. … I think it really speaks to the quality of the overall assortment,” Rainey said.
A Walmart employee completing a delivery.
Along with improving its stance on fresh foods, Walmart is also focused on convenience for its customers, he added.
Pharmacy delivery, which is available at the majority of the retailer’s stores, is promoting “sticky behavior” among customers, Rainey said. Last fall, Walmart launched same-day pharmacy delivery nationwide.
“[With] pharmacy delivery, we can easily provide the opportunity for customers to add in additional food items or add in general merchandise or maybe there’s other items within the pharmacy that they want to have delivered … and there’s no company that can do all three of those: [general merchandise], food and pharmacy,” he said.
E-commerce, especially delivery, is another key growth driver for the company. Reliable and fast delivery is the “single most compelling part of the value proposition” for its Walmart+ membership program, Rainey said.
Walmart is encouraged by consumers’ willingness to pay for speedier delivery.
Walmart has almost doubled the number of deliveries done in under three hours from the first quarter of last year, Rainey said. In recent weeks, express delivery has accounted for as much as 40% of delivery orders, he said, noting that this quick delivery option accounted for one-third of delivery orders in the company’s most recent quarter.
“We continue to see that customers are willing to actually pay for that expedited delivery,” he said.