Memo from MFJ

Can Giant Grocers Benefit Consumers?

December 2010

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Walmart is America’s largest food retailer. It markets about 20 percent of all the food sold in the country. It’s also a retailer that many people love to hate. The chain’s economies of scale and suburban or exurban locations have wiped out numerous smaller hardware, housewares, clothing, and grocery stores. And its relatively low wages and antiunion policy have made it a longstanding target of labor unions.

By 2013, almost 10 percent of Walmart’s produce will be grown locally, says the retail giant.

But Walmart appears to be gradually morphing in a much more socially responsible direction—to burnish its image, protect its bottom line, and actually do good.

Because it is such a huge buyer of goods, when Walmart snaps its fingers, suppliers jump. Walmart has used that unrivaled market power in some environmentally sensible ways.

For instance, the corporate giant basically forced the entire detergents industry to switch to concentrated liquids, which dramatically reduced package sizes, solid waste, and transportation costs. And Walmart says that it is making its new stores 25 percent more energy efficient, aiming to double the efficiency of its truck fleet, and encouraging its 100,000 suppliers around the world to improve their energy efficiency.

In October, Walmart announced that it will use its market power to support a new, global sustainable-agriculture initiative to help small and medium-size farmers. The chain has set targets to get more local, fresher foods into its stores. By 2013, Walmart says that it expects to double, to 9 percent, the amount of locally grown fruits and vegetables it sells (“locally” means grown in the same state). That would lower transportation costs and reduce air pollution. The goal sounds modest, but it would involve a huge amount of food, and I hope it will increase over time.

Major retailers like Walmart, Costco, Kroger, and Safeway also could make the food supply healthier. A huge retailer simply could tell its suppliers to eliminate partially hydrogenated vegetable oil (the source of trans fat) from their foods. Poof! Goodbye trans. A retail giant could tell its suppliers that their foods must have less than a given amount of sodium. Bingo! Watch the sodium tumble. Similarly, giant food retailers could require their suppliers to say on the fronts of packages whether sodium or sugar or saturated fat was “high,” “medium,” or “low.” If manufacturers had to call their foods “high sodium,” they might find a way to use less.

Grocery stores have long been passive sellers of whatever foods their suppliers provided. Let’s hope that Walmart and the entire grocery industry working together will exercise their bargaining muscle on the customer’s behalf.

Michael F. Jacobson, Ph.D.
Executive Director
Center for Science in the Public Interest

Our Hero

In October, CSPI Executive Director Michael Jacobson received the 2010 CDC Foundation Hero Award at the Centers for Disease Control and Prevention. The award honored Jacobson for championing nutrition and food safety initiatives, empowering consumers to make healthful choices, and encouraging scientists to engage in public interest activities.

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