Walmart's Offensive | Civil Eats

Walmart’s Offensive

Wal-Mart, the world’s largest corporation and food retailer, wants to remake its image. Its latest claim about its aggressive “food desert” strategy–that it plans to open more grocery stores in underserved areas–was made at a news conference where Michelle Obama spoke about the need to develop new sources of fresh and healthy food. At this press conference, Wal-Mart asserted that it was the biggest player on the block, having developed 218 stores in food desert areas between 2007 and 2011, with plans to build another 275-300 new stores in such areas by 2016.

How can one evaluate these assertions, given the problem of Wal-Mart’s long standing lack of transparency?  There are no maps of store locations with which to fact check Wal-Mart. Nor is there information about where and what products it sources for all its 8,970 stores around the world, including the more than 3,000 stores (2,900 of them huge supercenters) that sell groceries in the U.S.

According to the company’s annual reports, the number of Wal-Mart Supercenters in the U.S. increased from 2,447 in 2007 to 2,898 through FY 2011, while the company’s smaller sized Neighborhood Markets increased from 132 in 2007 to 160 in 2011. To compare those numbers with the food desert claims, it would mean that more than 45 percent of those 479 stores (451 Supercenters and 28 Neighborhood Markets) that opened between 2007 and FY 2011 would have been in food desert areas.  One could also look at Wal-Mart’s state numbers:  Arizona increased by 14 Supercenters and 10 neighborhood markets in places like Mesa, hardly a food desert.

Wal-Mart also uses USDA’s criteria for food deserts of 20 percent or greater poverty rate, of store size (more than 50 employees and $2 million in sales), and of proximity to food access (more than one mile to the closest grocery store in urban areas, more than 10 miles in rural areas). But these markers are not always good indicators of a food desert.

Take distance, for example. Proximity to a supermarket does not take into account other types of stores that may already be present in those areas, such as ethnic groceries, small chains, and/or independent stores. Distance by itself also does not indicate whether that mile is through safe or dangerous streets or whether a bus connects residential areas to retail. One might be less skeptical of Wal-Mart’s claims that nearly half of their recently opened stores are in food deserts if the company released a list of those store locations and supporting demographic data.  One could also then check to see whether in fact there are alternative food sources and whether the new Wal-Mart store contributed to the folding of any of the alternative places to shop, as has happened when a Wal-Mart comes to a new location.

Moreover, Wal-Mart store expansion has increased far more internationally than domestically. There are now more stores outside than inside the U.S., whereas in 2007 there was a four to three ratio of stores in the U.S. compared to stores outside the U.S. Those stores outside the U.S. are also performing better. Revenues at Wal-Mart’s U.S. stores have in fact declined for seven straight quarters. It’s not simply that growth is occurring abroad but that the store development is also associated with its global supply chain approach, which includes squeezing its suppliers and establishing a global sourcing strategy for all its products, including food products.

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Wal-Mart’s efforts to position itself in India illustrate this approach. India’s limits on foreign ownership of  “multi-brand retail” operations had prevented Wal-Mart from gaining a foothold in the world’s second largest market. This restriction was partly due to the critical role of the family-owned small stores (the kirana) and traditional bazaars that have long characterized where and how people shop in India. But a Wal-Mart led campaign to let the global retailers in is about to pay off, as a key entity, the Committee of Secretaries, recently gave its support for foreign expansion into the retail sector. For their glamorous debut, Wal-Mart says it will expand the number of farmers with whom it does business and also provide them with the basis to enter export markets through their relationship to Wal-Mart.

Wal-Mart’s President Michael Duke told the Federation of Indian Chambers of Commerce this past October, “Historically, our experience has been that as our retail operations grow globally, suppliers have a chance to grow with us. As we get to know their business and their local product, they gain exposure far beyond their country markets.” For India–and for the U.S.–the Wal-Mart way is that of the global retailer and the global supply chain, overcoming all in its path, whether the Indian kirana or the ethnic markets and green grocers in places like Los Angeles and New York where it has yet to penetrate.

Global in this case–and in many others–trumps local in present time and the 2016 completion of Wal-Mart’s projected future.

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Robert Gottlieb is the Director of the Urban & Environmental Policy Institute at Occidental College and the co-author with Anupama Joshi of the book Food Justice (MIT Press). He recently returned from a series of community and campus talks on food justice issues in Arizona. Read more >

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