Commentary

It's Walmart's Ball, And It's Changing The Game

It's getting hard to not like Walmart, or at least the way it has been throwing around its considerable weight to make the world a better place for the last three years or so. I never thought I'd write that.

Just so you know where I'm coming from, I frankly get the heebie-jeebies as soon as I spot a greeter in one of those ill-fitting vests. And 20 years ago, when I was writing for a magazine that covered the business of newspapering, the prevailing storyline was that Walmart was destroying Main Street and, in turn, sapping journalism of its lifeblood, retail advertising. It may still be, but that's the last millennium's news.

Yesterday's announcement about the five initiatives Walmart is undertaking to "make food healthier and healthier food more affordable" is extraordinary for the same reason that the company's partnership with the Environment Defense Funds on environmental issues has been. The EDL makes the case on its website when it states that no company has a greater potential to effect change.

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"Every week, more than 176 million customers shop at Walmart's 5,300 stores," it points out, and "with $401 billion in revenue, the company is bigger than 160 nations."

But it's not just Walmart's customers who will feel the impact. The standards Walmart sets will be matched or bettered throughout its supply chain. Were you are shocked as I was to read that 16% of Kraft's business walks out of the sliding doors of a Walmart? Competitors, of course, will have to keep up with Bentonville, too.

One indication of the enormity of the announcement -- besides the involvement of Michelle Obama -- was that Center for Science in the Public Interest executive director Michael Jacobsen, always a go-to guy for a critical quote about the food industry, has good things to say about it right in the Walmart press release.

"I applaud Walmart for moving the food industry in a healthier direction," he says. "Walmart's action should virtually eliminate artificial trans fat and significantly reduce salt in packaged foods and, most importantly, prevent thousands of fatal heart attacks and strokes each year."

But when the New York Times broke the news of the impending announcement in yesterday's editions, Jacobsen expressed a few caveats. He thought that the reduction of sugar was less than it should be and notably did not include soft drinks. He also wondered why the timeline for implementing the changes was so long. Indeed, how long does it take to lower the costs on delivering vegetable and fruits to consumers? And do we really need to be weaned so slowly from that added sugar and salt?

Leslie Dach, Walmart's evp for corporate affairs, tells the Times that the company faces a real challenge in its goal to reformulate its products. "We think it's a realistic target, but it's aspirational in the sense that we can't tell you today how it's all going to get done," he says.

I spoke to someone who has worked closely with Walmart on some of its go-good projects. "It's heartening to see them move way upstream on the public health food chain," the source said, but cautioned that everything Walmart does must be viewed through the lens of its mission: low prices every day.

"This must mean they believe they can move upscale and capture diet-conscious existing customers or increase frequency of visits. And more power to them if this initiative delivers as advertised," he says.

Meanwhile, the always sage Marion Nestle points out that the low wages and poor working conditions at Walmart stores remain a keystone issue. And she is dubious about the benefits of incremental improvements to items such as mac & cheese and frozen pizzas.

"I'll say it again," she writes, "a better-for-you processed food is not necessarily a good choice." But Nestle does believe that driving down the price of fruits, veggies and, presumably, products made with whole grains, "could make a real difference."

Coincidentally, news broke this week about a yet-to-be published study that finds that that when Walmart supercenters move into an area, the overall weight of the population goes up about 1.5 pounds per person over 10 years (presumably over the norm). It's not just Walmart shoppers, either, because local competitors are forced to lower their prices on foods that aren't good for you.

"I think the most obvious story is that Walmart lowers the price of foods and a lot of the foods it has big price advantages on are the processed, inner-aisle types of food that aren't that good for you," says Charles Courtemanche, a professor of economics at the University of North Carolina who one of the authors of the study. But, he says, "we don't want people to look at this and immediately say Walmart is evil. We want people to realize this is one of many things that are going on, and maybe some are good and some are bad."

At the end of the day -- when you look yourself in the mirror and ask, "did we make progress today; did we do the right thing?" -- I think Walmart deserves to give itself a very positive affirmation. Everything else being what it is, it did good yesterday, and the implementation of the programs should have a positive impact on an enormous amount of individual lives.

1 comment about "It's Walmart's Ball, And It's Changing The Game".
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  1. Marti Barletta from The TrendSight Group, January 24, 2011 at 6:38 p.m.

    Once again Thom Forbes has the smarts and integrity to tell it like it is. It's become all too common for journalists and commentators of all kinds to focus only on the negative. Knowing it's the provocative headline that will attract readers, the nasty slant that will get them riled up enough to comment, it's all too tempting to succumb to the temptation to seek attention for its own sake.

    But all this negative attention is at the expense of sharing the good news with people when it's available. Given the strong role of expectations in driving economic activity, a little optimism would go a long way in reassuring people that it's safe to come out of the bunkers in which we've been hunkered down for the last three years.

    And frankly, not only does a company like WalMart deserve some props for making efforts to make things better; but people are more likely to make better choices with their own dollars - both consuming and investing - when they have a balanced perspective.

    Is WalMart perfect? No. Are they making progress. No doubt about it. I thank them for that, and I thank Thom Forbes for calling it out.

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