Wal-Mart shakes up detergent aisle

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Wal-Mart stores is scrapping its once-feared private-label detergent program but replacing it with something that may shake up marketers in the $6 billion category even more. The retail giant is beginning national distribution of Huish Detergents' Sun brand at a category record-low price of $1.90 for a 100-ounce bottle of liquid detergent.

The move has in turn forced Henkel's recently acquired Dial Corp. to cut the price of its biggest brand, Purex detergent, according to executives familiar with the situation. Purex, now priced at under $3 at Wal-Mart, is cutting its price about 17% in an effort to bring it to around $2.50 at Wal-Mart, and will offer other retailers bonus packs with 20% free product added, effective June 1.

premiums steady

The moves by Wal-Mart so far appear to have had little impact on more premium and heavily advertised products, such as Procter & Gamble Co.'s Tide, though P&G's smaller Era brand has also cut its price to roughly $3.50 at Wal-Mart.

Analysts said the move shows Wal-Mart, despite accepting price increases ranging from 6% to 9% on paper brands to take effect in July, is still a long way from going soft on pricing and will still push marketers for the best deals.

Spokespeople for Wal-Mart and Dial could not reach executives for comment on the moves. An executive for Huish did not return calls for comment.

"I'm not surprised they're getting out of private-label detergents, because the branded companies do such a good job," said Bill Steele, analyst with Banc of America Securities.

Besides Great Value detergent, Wal-Mart has also dropped the Sam's American Choice mid-tier private label originally launched in 1999. Arm & Hammer and Era, both priced around the same $3.50 price point occupied by that brand, are gaining shelf space as a result as Wal-Mart resets its shelves.

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