Wal-Mart ‘Cultivates Local Economies’: Progress or Hype?

Wal-Mart’s announcement last week that it would source $400 million in local produce may provide a positive PR boost for a company that is notorious for its abundance of outsourced products. It is only a small chunk of Wal-Mart’s $53 billion-a-year grocery market (less than 1%), however, leading to the conclusion that the decision to “cultivate local economies” is more hype, rather than actual progress. Wal-Mart’s overall food sourcing practices continue to display over-reliance on imported food, questionable on account of the environmental toll it effects, in addition to safety concerns within the food supply chain. In 2003, the United States Economic Research Service outlined how food imports may pose dangerous risks for consumers:

...the globalization of the food supply could introduce new food safety risks, revive previously controlled risks, and spread contaminated food wider.

Further, Brian White of BloggingStocks finds a correlation between the rise in imported food items and the rise in chemically-riden, salty foods that are so popular, and cheap, in your local Wal-mart:

Wal-Mart seems like the anti-retailer when it comes to local and fresh food items. Indeed, much of the product lines in a typical Wal-Mart location are sourced from outside the U.S. (non-food items). But, do you really know where those processed food items come from too? The ingredients inside many of those items are so loaded with chemicals and salt to make them taste good, but the true ingredients are from non-U.S. origins and are anything but local in origin.

Without a comprehensive commitment towards the goal of sourcing food locally, Wal-Mart will continue to run roughshod over the legitimate environmental and safety concerns associated with an over-reliance on imported food items. Wal-Mart’s commitment to source less than 1% of its grocery supply hardly deserves cheering commendation.

International Trade and Food Safety: Economic Theory and Case Studies [United States Economic Research Service]

The Wal-Mart Weekly: Venturing into the local food supply chain [BloggingStocks]

Posted by Tony Calero on Tuesday, July 08, 2008