Jet.com Jumps Into Private Label Grocery

Jet.com, Walmart’s eCommerce site, will soon launch its first private-label brand, poised to introduce more than 60 food and household items in the coming months.

The New York Post reported that the site’s 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.

The move comes as the U.S. supermarket space gets more competitive. Amazon acquired Whole Foods this summer, and German discount chains Aldi and Lidl are expanding rapidly across the country – largely based on the strength of their private-label groceries.

Walmart is relying on Jet.com, which it bought last year for $3 billion, to boost its digital presence. Earlier this year, Walmart began selling its private label grocery brands – Great Value, Equate and Sam’s Choice – on the site, but the brands are not popular with Jet.com’s younger customers.

And in June, it was announced that Jet.com would be phasing out retail products under the Kirkland Signature brand, which is owned by Costco.

“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 new private label grocery brands and products will launch exclusively on Jet.com for the first year, and will later sell on Walmart.com. They may eventually be sold in Walmart stores.

A major focus will be on breakfast cereals, which have risen in price more quickly than most grocery items, experts said. And many big packaged food companies are expected to welcome Jet.com’s initiative because it softens Amazon’s leverage.

“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 toward making unreasonable demands in its procurement.”