Walmart Expands Private Labels as Consumer Habits Shift

Summary: Walmart de México y Centroamérica is expanding its private-label strategy, aiming to increase exclusive-brand sales from 17% to 25% of total revenue within five years as consumers prioritize value amid weaker spending. While cautious consumption has slowed store traffic, Walmex continues investing in e-commerce, logistics automation, AI-enabled store technologies and new locations to strengthen operational efficiency and support long-term retail growth. 

Walmart de México y Centroamérica (Walmex) is strengthening its private-label strategy as part of a broader effort to respond to changing consumer behavior and drive long-term growth. The retailer said its private brands accounted for approximately 17% of total sales across its retail formats at the end of 2025 and aims to increase that share to about 25% over the next five years.

The initiative comes as Mexico's largest retailer navigates softer consumer demand while continuing to invest in new stores, e-commerce, supply chain automation and digital technologies. Company executives said private labels have become a strategic pillar because they allow Walmart to offer exclusive products at competitive prices while maintaining quality standards across multiple categories. 

Private Labels Become a Growth Driver

As consumers become more selective with their spending, Walmart is expanding its portfolio of private brands to reinforce its value proposition.

Walmart de México currently manages more than 40 private-label brands across essential goods, everyday consumer products and durable goods. These brands are available throughout the company's retail formats, including Bodega Aurrera, Mi Bodega Aurrera, Bodega Aurrera Express, Walmart and Sam's Club.

Javier Andrade, Vice President of Merchandising for Walmart de México y Centroamérica, said private brands have become one of the company's main growth engines.

"They allow us to strengthen our value proposition by offering exclusive, quality products at everyday low prices, while delivering a consistent experience across both our stores and digital channels," Andrade told El Cronista.

According to Andrade, Walmart plans to accelerate the penetration of private-label products to approximately 25% of total sales over the next five years.

Consumer acceptance has increased steadily. Andrade said private-label participation within Walmart de México has risen by more than 300 basis points during the past three years, reflecting growing customer confidence in the retailer's exclusive product portfolio.

He attributed this trend to changing shopping habits, with consumers placing greater emphasis on obtaining the best balance between quality, price and trust. Walmart continuously analyzes customer preferences to develop products with consistent branding and packaging that are easy to identify in stores.

The executive added that every private-label product undergoes quality assurance processes that include audits, certifications, laboratory testing and consumer evaluations before reaching store shelves.

Walmart also leverages its global scale to incorporate product development expertise and innovation from other markets while maintaining competitive pricing. 

Consumer Caution Weighs on Sales

While private labels continue gaining momentum, Walmart is operating in a retail environment characterized by slower consumption and more cautious purchasing decisions.

During the second quarter of 2026, Walmex reported revenue of MX$209.2 billion, an increase of 3.1% compared to the same period a year earlier. Comparable-store sales rose 1.8%, supported by a 2.9% increase in average ticket size. However, total customer transactions declined 1.1%, reflecting lower store traffic, reported MBN. 

"The slower-than-expected recovery in consumption is clearly affecting our revenue performance," said Cristian Barrientos Pozo, President and CEO of Walmart de México y Centroamérica, during the company's earnings webcast.

Barrientos said the results remained below the company's expectations and acknowledged that operational execution must improve in several areas.

The company noted that customers are spending more time comparing prices and planning purchases before visiting stores, reinforcing a more cautious consumption environment in Mexico.

Bodega Aurrera, Walmex's largest retail format, experienced lower-than-expected performance during the quarter due to weaker customer traffic and smaller shopping baskets, particularly in larger stores located in central Mexico.

Sam's Club posted the strongest results among the company's formats. Membership acquisition recorded double-digit growth, while more customers upgraded to the premium Plus membership.

To encourage customer visits, Walmex is replacing its long-running Martes de Frescura promotional program with a new strategy that the company said has already generated higher sales and increased traffic during its initial implementation.

The retailer also continued expanding its physical presence, opening 21 new Bodega Aurrera stores during the quarter and increasing its network in Mexico to 3,351 locations.

Beginning in January 2027, Walmex will implement its first reduction in employee working hours, although the company has not disclosed additional details about the measure. 

Digital Operations Continue to Expand

Alongside investments in physical stores, Walmart continues strengthening its digital business as online retail remains one of its fastest-growing segments.

Net e-commerce sales increased 16.2% year over year during the second quarter, while the company's On-Demand business grew 21.1%.

Delivery speed remains a central element of Walmart's digital strategy. Nearly 70% of online orders were delivered the same day, and almost one-quarter arrived in less than two hours. The retailer has also launched 60-minute delivery pilot programs at selected Bodega Aurrera Express and Sam's Club locations.

Marketplace performance was mixed. Gross merchandise value declined 6.6%, which the company attributed to issues involving marketplace sellers. Despite that decline, the marketplace continued expanding its assortment, increasing its product catalog by 26%.

Walmart Fulfillment Services now manages approximately 45% of marketplace orders, strengthening logistics capabilities as the retailer expands its third-party seller ecosystem. 

Technology Supports Retail Modernization

As Walmart broadens both its physical and digital operations, technology has become a central component of its long-term retail strategy.

The company is deploying one of Latin America's largest electronic shelf-label projects through a partnership with Vusion.

The first phase includes installing more than 1.7 million electronic shelf labels and more than 180,000 EdgeSense smart rails across its store network. Deployment will begin at Walmart Express locations before expanding to Walmart Supercenter stores, while a pilot program is also planned for Bodega Aurrera stores.

EdgeSense combines electronic shelf labels with artificial intelligence, computer vision and real-time data systems to automate pricing, improve inventory accuracy and strengthen shelf management. The technology is intended to reduce manual processes while enabling faster price updates and more efficient merchandising.

According to Vusion, Walmart de México will become the first retailer in Latin America to deploy EdgeSense technology at this scale, supporting its strategy to develop connected stores and modernize retail operations across multiple formats.

The technology rollout complements broader investments in logistics automation and digital infrastructure as the retailer seeks to improve operational efficiency while expanding its private-label portfolio and adapting to evolving consumer demand.