Private labels nail hardware brands - Wal-Mart Stores Inc - Wal-Mart

Discount Store News, June 7, 1993

Wal-Mart has stamped Popular Mechanics, its hardware private label, all over the department.

And the Wal-Mart brand of private label paint is another focal point of the department, getting more shelf space than Glidden and Dutch Boy Kem-Tone combined.

Wal-Mart has now rolled out all the hardware items covered under its licensing agreement with Hearst, publisher of Popular Mechanics (PM) magazine.

That agreement makes no provision for using the PM name on paint and forbids its use on power tools, said David Graff, director of licensing for Hearst. Permitting its use on power tools would create a conflict with Black & Decker and Skil, which both advertise in Popular Mechanics, Graff said.

(Wal-Mart also carries both Skil and B&D power tools.)

But on hundreds of items in mechanics hand tools, TV and audio cable and connectors, carpenter tools, nails, nuts and bolts and other fasteners, electrical supplies, plumctsing supplies, including kitchen and bath faucets, the PM name now dominates traditional national brand names in Wal-Mart hardware, including Stanley, Bull Dog and Woods Wire.

Under terms of its license, Wal-Mart had to submit for independent testing each item that would bear the PM name, Graff said.

"We're very pleased with the quality of the lines," Graff said. "It can't help but enhance the image of the magazine."

Like Sears does with its Craftsman private label tools, Wal-Mart offers a lifetime guarantee for its PM tools, both mechanics and carpenters. If a tool breaks, "just bring it in" for a free replacement, a hardware associate said.

"We are very happy with our quality control" on private label products, said vice chairman and chief operating officer Don Soderquist. "There is nothing in our line that is not tested frequently."

Soderquist emphasized that Wal-Mart is "a national brand company" that will continue to carry and feature national brands in hard lines and across the board.

Nonetheless, "private label provides us with a competitive weapon to spice up the assortment," he added.

The PM program supplants an abortive effort of Wal-Mart to launch a private label hardware line called Promark.

"Popular Mechanics is a wonderful brand name," said George Rosenbaum, chief executive officer of Leo J. Shapiro & Associates, Chicago. "Popular Mechanics is associated with a whole rich reading experience" that goes back 70 years, he said.

"Wal-Mart has co-opted one of the great brand names that had no merchandise associated with it."

With PM, Wal-Mart is taking the long view toward developing it into a national brand, as Sears did with Craftsman, said Sid Doolittle, partner in the Chicago retail consulting firm of McMillan/Doolittle. "Expansion of the line shows it is doing well," Doolittle said. "They must have confidence in what they're doing."

In order to give the customer a better buy, Wal-Mart takes the same margins on private label merchandise as it does on national brands, said Dan Barry, retail analyst for Merrill Lynch.

As an example of PM merchandising and pricing, a 30-foot, one-inch tape rule goes for $7.97, compared to the Stanley 30-foot rule displayed above it at $11.97.

The PM line also includes tool boxes, such as a 20-inch steel box, at $14.96, price roll-back from $16.96, compared to a Rubbermaid Roughneck plastic, 20-inch box at-$18.96. Almost all of the PM tools are marked as made in the U.S.A.

Wal-Mart has also licensed the name of Better Homes and Gardens for lawn & garden products and will start selling them next January.

Paint is another focus of Wal-Mart's private label program in hardware, and the chain is making an effort to improve the category by expanding its custom color mixing capability three fold.

United Coatings, which makes the Wal-Mart private label paint, developed what it calls the Paint Place custom mixing station. United designed the equipment so it can custom color any of three brands - Glidden and Dutch Boy, which both provided their base formulas, or Wal-Mart - to match 944 color chips.

Beginning in June, Wal-Mart paint customers will be able to select from 3,000 custom paint colors.

In the Middletown. N.Y., store, Wal-Mart brand paint gets a full gondola run, plus an end cap, compared to Dutch Boy and Glidden, which share a run. In the Tom's River, N.J., store, Wal-Mart brand also gets a palletized display next to the custom paint mixing station. On one side, Wal-Mart satin exterior paint, which carries an explicit 12-year performance guarantee. was priced at $10.97 a gallon: On the other half of the pallet, Wal-Mart was offering a noname, directly-sourced white housepaint carrying a five-year guarantee at $11 for a 2-gallon pail.

The interior flat Wal-mart brand, which carries a 15-year explicit guarantee, sells for $7.47 and semi-gloss sells for $8.47. Dutch Boy and Glidden are $2 a gallon higher and carry no explicit performance guarantee.

The 12-and 15-year guarantees give Wal-Mart private label paint credibility with customers, said Bill Carver, Wal-Mart national accounts manager for Dutch Boy. Like Glidden, Dutch Boy carries a "satisfaction guaranteed" warranty.