Walmart Takes Its Private-Label Grocery Efforts to the Next Level
Last week, Walmart (NYSE: WMT) moved deeper into the beef wholesale business. A new 201,000-square-foot facility in Thomasville, Georgia, will distribute meat sourced nearby to 500 of its stores in the southeastern U.S. Although it will be operated by a third party, the operation itself is intended solely to meet Walmart's Angus beef needs.
It's outside the norm, to be sure. Familiar names like Tyson Foods and Cargill have historically supplied Walmart's meat, and those two names will continue to supply most of the company's U.S. stores. Such vertical supply integrations are quickly becoming the new norm, however, and retailers that can tackle such projects are better off for it.
Yes, it's part of a bigger private-label movement that retailers are increasingly embracing. The Kirkland brand of foods is Costco Wholesale's (NASDAQ: COST) best-selling brand, driving about one-fourth of its total revenue. The Simple Truth line of products was created by Kroger (NYSE: KR) for Kroger. The Good & Gather line found at Target stores is one of several house brands managed by that retailer.
Source Fool.com
