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BENTONVILLE, Ark. -- Store brand products have an important role to play in Wal-Mart's over-the-counter assortment. But while many retailers use their store brands to bolster profit margins, Wal-Mart is more interested in using its Equate brand to keep opening pace points low.
'We take a different approach at Wal-Mart with the Equate brand compared to what most retailers do with their store brands,' states Chuck Fehlig, vice president and divisional merchandise manager for overthe-counter drugs in Wal-Mart's pharmacy division.
'We've never really marketed the Equate brand to any extent. We've never used compareand-save signing, for example, the way virtually all of our competitors do. And we've never let the Equate brand proliferate in SKUs either.'
As a result, Fehlig says, WalMart offers far fewer private label SKUs in its O-T-C and beauty care departments than most of its competitors.
'But we do carry the items in the sizes we feel are most relevant to the consumer and where there's a void in an opening price point,' he notes.
Despite the company's limited promotion and expansion of the Equate brand, Wal-Mart's sheer size has turned it into the largest health care brand in the United States. And Wal-Mart takes the quality of the products very seriously.
'We have an extensive quality control program that we started about five years ago,' Fehlig says. 'We use an outside lab to test our product randomly off the shelf.'
Although such quality control might seem to be the responsibility of the Food and Drug Administration, that agency is famously shorthanded and is only required to visit a given manufacturing facility every two years.
'So we've put this extra step in place, just to ensure that the product quality is there for us,' Fehlig notes. 'And we do the same thing in our vitamin/nutritional line, Spring Valley.'
Along with quality, Wal-Mart emphasizes low prices. According to Fehlig, the company's own studies concerning the prices of its private label offerings suggest that they are more than 30% lower than those of most of Wal-Mart's drug store competition.
'When it comes to Equate, we don't have plans to expand the product line,' Fehlig comments. 'But we do intend to continue to try to drive prices as low as we possibly can in order to help our customers out with their health care budget.'
