Walmart Stores Inc, the world’s largest retailer, said it is joining US first lady Michelle Obama’s anti-obesity campaign by stocking healthier foods.
The company said it will reformulate thousands of packaged food items by 2015, reducing the salt content by 25 per cent and sugar content by 10 per cent, and will remove all remaining industrially produced trans fats and partially hydrogenated oils.
“No family should have to choose between food that is healthier for them and food they can afford,” Bill Simon, chief executive officer of US stores for Bentonville, Arkansas-based Walmart, said in a statement.
With more than 140 million customer visits each week, Walmart “is uniquely positioned to make a difference” by making healthy foods more affordable, said Simon, who joined Mrs Obama for an event today in Washington.
The first lady said Walmart’s initiative is a victory for parents and children that will give families more information and more opportunities to eat more healthy foods. She said that because of company’s size, the move “has the potential to transform the marketplace”.
Walmart said it plans to reduce prices to save customers about $1 billion a year on fresh fruits and vegetables. The company said it would develop “strong criteria” for simple front-of-package seals that would help consumers identify healthier foods, including whole-grain cereals, whole-wheat pastas or unsweetened canned fruit.
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Supply chain
Andrea Thomas, Walmart’s senior vice president of sustainability, said lower costs will come in part from planned efforts to make the entire supply chain more efficient, including steps to stock more produce from local farmers to reduce shipping costs.
“Let’s call it what it is — an expense cutting programme,” said Brian Sozzi, an analyst at Wall Street Strategies in New York who recommends selling the shares. “I am not trying to discount what they are doing here, but 51 per cent of their sales are tied to grocery, and inflation is climbing in the category. If they can reduce costs here and drive higher volume through share gains, it’s a nice formula.”
Walmart rose 96 cents to $55.99 in New York Stock Exchange composite trading. The shares have gained 3.8 per cent so far this year.
Walmart’s announcement also provides a public relations benefit, said Colin McGranahan, analyst at Sanford C Bernstein in New York.
“It’s largely a big PR effort and part of the larger strategy to win over the hearts and minds of regulators, politicians and others that oppose Walmart’s efforts to grow their store base in urban markets,” said McGranahan, who rates the shares “market perform”.