Wal-Mart is no stranger to dichotomy, especially when viewed through the public eye. Depending on who you ask, the company is a corporate model for small-town success, or a beast that swallows Main Streets whole. They are a provider of everyday low prices, or a bully that squeezes suppliers for every last penny.

For Wal-Mart, there always seems to be two sides to every story.

This has especially been true over the past year as Wal-Mart pursued a two pronged strategy emphasizing the expansion of their Great Value private label brand, while simultaneously streamlining store layouts and upgrading product offerings in clothing and electronics in an effort to appeal to the Target crowd.

The result?

With the ubiquitous white Great Value packages gobbling up shelf-space from the likes of Kraft and Smucker’s, some brand-conscious shoppers have begun to turn their back on the world’s largest retailer. According to an article in this week’s Time Magazine, Wal-Mart experienced negative same-store sales growth for the third straight quarter. That’s an unheard of decline in Bentonville. To combat the slide, Wal-Mart plans to do what Wal-Mart does best. Another round of price cuts.

As for the Great Value line, it appears that it won’t be getting cut anytime soon, which is unfortunate.

Wal-Mart’s entire empire has been built on the idea of selling a wide swath of brand name products for less than their competitors. Now, with the expansion of the Great Value line, that philosophy has become “we sell an increasingly limited line of brand name products, and their Great Value equivalents, for a little less than our competition.” Sound exaggerated? In the past year, Wal-Mart has jettisoned nearly 300 name brands from their shelves in order to make room for their own private label offerings.

Not only does the growth of the Great Value line limit what we as consumers can find at Wal-Mart now, it also limits what we may buy in the future. As companies like Kraft lose shelf space at Wal-Mart, they lose the ability to get new products into the market. Instead of having the luxury of multiple product lines, producers will be forced to stick with a few “category killers,” which could stifle innovation (not that there are a lot of ways to innovate with Oreo cookies, but still).

Some may argue that sales in the Great Value line have been strong, and that may be true. But, think of the emotional connection that people will have to these products. Items like Kraft Mac-N-Cheese and JIF Peanut Butter remind people of the good times they had growing up and after-school snacks made by mom. If you’re in a household that is trading down, Great Value products may remind you of how your parents were out of work during the worst recession in 80 years. This is why I do not buy into the idea that consumers will continue to stick with “generic” products over the long run.

Private label products are meant to complement, not replace, name brands. Until Wal-Mart realizes this, they will continue to lose foot traffic to competitors who provide customers with the variety they want.