The Wal-Mart Watch Blog
Food

24 comments | Jun 11, 2007

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[From “Louisiana Wal-Mart stores affected by Tyson meat recall” in The Daily Advertiser (La.)]

Tyson Fresh Meats Inc. is voluntarily recalling packages of ground beef produced at its plant in Sherman, Texas. Some of those packages were distributed to Wal-Mart stores in Louisiana.

In a news release, Tyson officials said a ground beef sample analyzed was found to contain a strain of E. coli.

So far, there have been no illnesses reported or associated with any of the ground beef packages. However, the company is recalling the packages as a precautionary measure. The action involves 40,440 pounds of ground beef that are sold in pre-packaged trays and placed directly into the meat case.

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0 comments | Jun 06, 2007

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[From Wall Street Journal]

Earlier this decade, the hidebound supermarket business was expected to fall before Wal-Mart’s aggressive supercenter rollout and the rise of membership clubs like Costco Wholesale Corp. and high-end specialty chains like Whole Foods Market Inc. Many chains did collapse—26 filed for bankruptcy earlier this decade, unable to match the falling prices of their better-run rivals—and a wave of consolidation swept the business. But the survivors rallied by redesigning stores, introducing a more relaxed shopping experience and marrying low-priced staples with higher-margin breads, meats and wine. Now, the stronger chains like Kroger Co. and SuperValu Inc. are taking market share from weaker, often regional, grocers.

Supermarkets have begun to attract new investment from those sensing a sustainable edge. Hedge fund Cerberus Capital Management LP recently joined two retailers in acquiring Albertson’s Inc., a Boise, Idaho, chain, and Britain’s Tesco PLC is expected to begin rolling out 100 U.S. stores in the Southwest later this year. Great Atlantic & Pacific Tea Co., once a symbol of the big chains’ decline, recently acquired rival Pathmark Stores Inc. for $700 million.

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24 comments | Jun 05, 2007

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From dictionary.com:

mo·nop·so·ny - [muh-nop-suh-nee]
the market condition that exists when there is one buyer. 

Wal-Mart Slowdown to Hit Food Sector [Wall Street Journal]

res Inc.’s decision last week to ratchet back on its domestic store-expansion plans could affect its suppliers and competitors in the food industry.

Industry observers say packaged-food companies that rely heavily on Wal-Mart’s supercenters, which sell everything from food to furniture, could be hurt by its plan to slow the pace of U.S. store openings. General Mills Inc., Kellogg Co. and Del Monte Foods Co. could feel the strongest impact, Credit Suisse analyst Robert Moskow said in a note to investors.

On the other hand, the decision could be welcome news for rival supermarket chains, though they may not feel a benefit from the cutbacks until the second half of next year.

The potential impact underscores Wal-Mart’s increasing dominance in the food business in recent years. It accounted for an estimated 21.1% of sales in the U.S. grocery industry last year, more than twice that of the second largest grocer, Kroger Co., according to TDLinx, a division of Nielsen Co.

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0 comments | May 23, 2007

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From BusinessWeek:

As the U.S. and China hold high-level economic talks, there’s no shortage of important topics. At the top of the list for Treasury Secretary Henry Paulson and China Vice-Premier Wu Yi will be China’s trade surplus with the U.S., which hit $232 billion last year and has prompted Congress to consider all sorts of economic sanctions against China. China’s currency policy is a related issue. And the safety of pet foods from China has received attention because of the recent deaths of some animals in the U.S.

However, one topic has received less attention: China’s growing influence as an exporter of fresh produce for human consumption. While China’s overall exports of agricultural goods are relatively small, they’re growing at a torrid pace. In the first three months of this year, imports of fresh fruit from China grew 279%, to $7.4 million; fresh vegetables grew 66%, to $32 million; and fruit and vegetable juices grew 98%, to $109 million.

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2 comments | May 22, 2007

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An Editorial Comment on the Nation’s Largest Grocer
By Larry Mitchell, Chief Executive

With an ongoing food safety crisis involving everything from the recall of melamine-infused pet food to the quarantine of contaminated livestock to the tainting of frozen catfish fillets, glaring inadequacies are being found in America’s import and food system – inadequacies that are putting the health of consumers, the safety of the American food system and the vitality of America’s heartland at risk. 

As a system severely altered by the global economy, it has grown farther removed not only from our heartland, but from USDA and FDA food safety standards. Surprisingly, it’s also a system that is heavily influenced by Wal-Mart, the world’s largest company and the nation’s number one grocer.  Through the years, Wal-Mart has quietly but forcefully opposed additional food safety regulations and port inspections, as well as country of origin labeling (COOL).  It has put corporate profits over its customers’ safety time and time again—a dangerous combination not only to the direction of the American food system, but to the health and safety of the American consumer.

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13 comments | May 21, 2007

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For years, Wal-Mart has been pressuring companies to make their products cheaper and cheaper. For many companies, this has meant outsourcing production to countries overseas, most notably China. Now, after massive food recalls, Tyson, Mission and Menu Foods have made a commitment to shift sourcing for food production away from China. While price pressures from Bentonville make production in China an alluring option, the fear of multi-billion dollar class action lawsuits may be even more powerful.  Though national food safety regulation has been substantially weakened under the Bush Administration, class action lawsuits remain a powerful tool for those advocating consumer protections, and the threat of class action encourages companies to adopt practices that protect consumers. Although choosing costlier, domestic suppliers might damage a company’s ties with Bentonville, class action lawsuits (the kind that result from poor quality food) can be much more damaging. With major players Tyson and Mission out of China, many smaller producers are sure to follow. Any food manufacturer that sources from China becomes a target for future lawsuits by taking on the increased risk from Chinese sourcing. 

While this does not necessarily mean increased domestic food production, it will probably mean companies will obtain food ingridients where food safety can be monitored more closely and where higher regulatory standards exist. 

Tainted Chinese Imports Common [Washington Post]

For years, U.S. inspection records show, China has flooded the United States with foods unfit for human consumption. And for years, FDA inspectors have simply returned to Chinese importers the small portion of those products they caught—many of which turned up at U.S. borders again, making a second or third attempt at entry.

Now the confluence of two events—the highly publicized contamination of U.S. chicken, pork and fish with tainted Chinese pet food ingredients and this week’s resumption of high-level economic and trade talks with China—has activists and members of Congress demanding that the United States tell China it is fed up.

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2 comments | May 11, 2007

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WAL-MART SALES BOTTOM OUT
The big story this week was Wal-Mart’s sales figures: the company hit an all-time low in the month of April. The company’s sales declined 3.5% last month, the latest dip in a long descent. What does this mean for Wal-Mart?

Wal-Mart posts largest monthly sales decline since 1980 [BloggingStocks]

The world’s largest retailer posted its worst monthly sales figures last night for April since the company began keeping those kinds of records 27 years ago in 1980. Is the world coming to an end? Of course not, and there were several seasonal variables that probably helped drag Wal-Mart down to its lowest monthly same-store sales growth figure in almost three decades. However, the company brought some on itself.

The Dog Ate My Homework [Writing on the Wal]

Walmart floats another set of lame excuses for poor sales..

That cold wind all the retailers are feeling may be the cold wind of a recession which has already started. The press won’t say that for fear of dampening the stock market rally.

April retails sales worse than expected [BloggingStocks]

It’s quite a feat of non-spending when Wal-Mart Stores Inc. sees a sales decline over over 2%, let alone a 3.5% decline for April (expectations were 2%). Sales at Federated Department Stores Inc. were also down, as were sales at once-trendy Gap, Inc.

In addition to an early Easter (six days earlier than in 2006), the cold snap in April put off spring and summer clothes purchases, so there was a double-whammy that brought April sales declines to a close. Also, our old friend—high gas prices—may have also contributed since per-gallon prices hovered in the area of $3 a gallon for the last few weeks of April, crossing that mark as well at the very start of May in much of the nation.

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0 comments | May 09, 2007

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In a release filed by the Cornucopia Institute yesterday, the Wisconsin Department of Agriculture, Trade and Consumer Protection lodged a formal complaint with Wal-Mart, accusing the company of mislabeling food in its grocery departments and misleading consumers to believe that non-organic food was in fact organic. Wal-Mart promptly responded, issuing new guidelines for employees if and when organic foods are available. Hopefully this will result in more honest and accurate labeling in Wal-Mart stores.

Wal-Mart updates organic labeling guidelines after Wisconsin complaint [Associated Press via Lacrosse (Wis.) Tribune]

Wal-Mart stores said Tuesday it has given updated guidelines to its employees following a complaint filed with the state of Wisconsin that some foods were incorrectly labeled on shelves as organic.

The complaint was filed with the state Department of Agriculture, Trade and Consumer Protection by the Cornucopia Institute, an organic industry watchdog group based in Cornucopia in far northern Wisconsin.

Wal-Mart said that green tags on their shelves, which identify food as organic, may have inadvertently or mistakenly been placed, or accidentally shifted in front of the wrong item.

“Our green organic signing is for additional consumer convenience to show that an organic alternative is available. It is not a label,” the company said in a statement. “The USDA (U.S. Department of Agriculture) certification label is featured on the packaging of the organic selections we offer and consumers should always rely on this USDA certification label for proper organic verification.”

Wal-Mart said it is working with store associates to have the identifying tags checked periodically for accuracy.

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0 comments | May 08, 2007

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The Cornucopia Institute: Wal-Mart Slapped for Misleading Organic Consumers

Consumer fraud investigators in the state of Wisconsin released their findings this week after a three-month long investigation into allegations that Wal-Mart stores throughout the state of Wisconsin had misled consumers by misidentifying conventional food items as organic.

In a letter to Wal-Mart Stores, Inc., based in Bentonville, Arkansas, the Wisconsin Department of Agriculture, Trade and Consumer Protection stated they’d found numerous instances of conventional food products improperly labeled as organic by the retail chain. Specifically, Wisconsin authorities told Wal-Mart’s legal counsel that “use of the term ‘Wal-Mart Organics’ in combination with reference to a specific non-organic product may be considered to be a misrepresentation and therefore a violation” of Wisconsin state statutes.

The Cornucopia Institute, a governmental and corporate organic industry watchdog, had filed complaints with Wisconsin regulators and the USDA after finding numerous incidents of fraudulent organic labeling in Wal-Mart stores in five states from Texas to Minnesota.

Although Wisconsin regulators opted to send only a formal warning concerning the retail giant’s organic marketing practices they said that they had reached an agreement with the company under which steps would be taken to prevent future organic food misrepresentations. Wisconsin officials also said they would be continuing their surveillance of the company’s stores.

“This finding is a victory for consumers who care about the integrity of organic food and farming,” said Mark Kastel, Codirector of The Cornucopia Institute. “Wal-Mart cannot be allowed to sell organic food ‘on the cheap’ because they lack the commitment to recruit qualified management or are unwilling to properly train their store personnel,” Kastel added. “Such practices place ethical retailers, their suppliers, and organic farmers at a competitive disadvantage.”

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29 comments | May 07, 2007

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Op-Ed: After the Pet Food Contamination [New York Times]

The purchase of toxic pet food ingredients from China is a chilling warning about the weakness of the nation’s defenses against tainted imported foods. Reports from pet owners indicate that the contaminated protein concentrate may have killed thousands of dogs and cats; it has also been found in farm animals.

As the global trade in foodstuffs expands, the Food and Drug Administration must be given more legal authority, money and inspectors to ensure the safety of imported foods. It would be even more tragic if the next episode were to kill thousands of people before being detected and contained.

It now looks as if two Chinese companies sold wheat gluten and rice protein spiked with an industrial chemical, melamine. Their apparent goal was to cut costs. Last week the F.D.A. rushed to upgrade its food safety programs, creating a new position — assistant commissioner for food protection — and naming a respected scientist to fill it. That should focus needed attention on a subject that often seems secondary in an agency straining to regulate drugs and medical devices. But not much will change until Congress provides money and legal authority to police foreign producers.

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