US Retail Industry Offers 'Altteul Products' Tailored to Consumers Who Want to "Save Money"

Walmart Increases Display of 1.9-Liter Milk from 3.8 Liters
Retail Industry Faces Inflation Blow, Responds with Low-Cost and Practical Products

Customers visiting Walmart Photo by Yonhap News

[Asia Economy Intern Reporter Kim Nayeon] In Korea, when it comes to milk containers, people easily think of 1L paper cartons, but in the United States, milk is mainly sold in gallon units. The 1-gallon, or 3.8L, size is the best-selling.

However, recently, Walmart, the largest retail chain in the U.S., has significantly increased the shelf space for 0.5-gallon milk containers instead of the usual 1-gallon (3.8L) size.

On the 28th (local time), The Wall Street Journal reported, "The distribution industry is changing marketing strategies such as launching new products and offering price discounts in response to customers' behavioral changes to reduce spending due to inflation, interest rate hikes, and stock market declines. Walmart has increased the shelf space for 0.5-gallon (about 1.9L) milk containers."

The 1.9L products are also placed in the most eye-catching spots on the shelves. John Furner, CEO of Walmart, stated, "Customers are switching to less expensive brands in dairy and meat products."

In the U.S. retail market, signs are emerging that 'value consumption' will become mainstream. According to a survey conducted by market research firm NPD in mid-this month in the U.S., 80% of respondents plan to reduce spending by purchasing cheaper or smaller quantity products.

Following Walmart, Target, the second-largest large retailer in the U.S., recently started discount events on TVs and kitchen appliances. Brian Cornell, CEO of Target, said, "We expected consumers to reduce spending on goods as the economic stimulus effect wanes, but we did not anticipate such a large scale of change."

Other retailers are also responding to changes in consumer patterns. Procter & Gamble (P&G), a household goods company, has started advertising kitchen detergent containers that can be used until the last drop. P&G’s recent launch of a new kitchen detergent product emphasizing "cost savings by extracting every last drop" is aimed at attracting the attention of 'thrifty consumers.'

On the other hand, Michaels, a craft supplies chain, has adopted a strategy to reduce marketing for high-priced craft tools. The Wall Street Journal pointed out, "(Due to inflation) the increase in sales of private brand (PB) products and the rise in retailers issuing discount coupons are also recent changes in the landscape."

Walmart has shifted its main discount marketing items from fashion to groceries such as rice and beans. John Furner, head of Walmart U.S., said, "Customers are also switching to cheaper brands in dairy and meat products."