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Wal-Mart grows its private-label options within the grocery aisles

Key Points
  • Wal-Mart is adding another in-house grocery brand, called Sam's Choice Italia.
  • The line will initially include 40 items, such as gnocchi, risotto, sauces and salad dressings.
  • Retail rivals Kroger, Target, Aldi, Lidl and even Amazon are beefing up their private-label food lines.
Source: Walmart

Wal-Mart may already be a giant, but it still has big ambitions for its food aisles.

The big-box retailer announced Friday the addition of another private-label, called Sam's Choice Italia.

Under the nameplate, Wal-Mart will initially roll out 40 items, including Italian boxed dinners, gnocchi, risotto, sauces and salad dressings. The products can be purchased in stores and online.

"Sam's Choice Italia is just the latest example of how Walmart is continuing to improve and innovate our Private Brand offerings while staying true to quality and everyday low prices," Jack Pestello, senior vice president of the Private Brands division in the U.S., said in a statement.

At an investor conference earlier this year, Wal-Mart Chief Executive Doug McMillon discussed the retailer's plans to expand its private-label lines, such as Great Value. McMillon said the company would put an even bigger emphasis on those brands.

"Having a private brand from a margin mix point of view has always been important, but it is even more important now," he told investors.

For grocery retailers, private-label options offer the opportunity to make up for dollars that are lost because profit margins are generally thin in the supermarket business.

Rivals including Kroger, Target, Aldi, Lidl, Costco, Whole Foods and even Amazon are beefing up their private-label food lines. Kroger has Simple Truth, for example. Amazon has a line of trail mixes and coffee, called Happy Belly. Target's popular in-house line is Market Pantry, and Costco has Kirkland Signature.

A recent study by consumer packaged goods market research firm IRI found that shoppers young and old are still turning to private-label options in grocery stores, even in a more stable economy.

Two-thirds of consumers plan to purchase private-label items more frequently in the coming six months, according to IRI's survey, which were released Wednesday.

Just this month, Wal-Mart's launched a private-label business called Uniquely J. With Jet, Wal-Mart is able to cater to a greater urban millennial market than it is with Sam's Club, for example, which competes with Costco.

Wal-Mart's overarching Sam's Choice moniker was initially introduced in the early '90s as Sam's American Choice, named after founder Sam Walton. The brand was revamped in 2013 to focus more on premium items with organic ingredients.