Walmart’s big push into groceries is not good for small farmers
When you think of Walmart, you probably think of cheap Chinese products and labor. But about two-thirds of the money Walmart spends to stock up its U.S. stores now goes for domestic products. That’s because, over the last decade, Walmart has moved aggressively into the grocery sector, and most of our food items are grown and produced here in the U.S. Ten years ago, groceries made up less than 25 percent of the retail giant’s sales; they now make up 55 percent. From CNN:
Experts say that this shift was no accident. The nation’s largest retailer adapted to fit the needs of its cash-strapped customers in the midst of a slow economic recovery. Shoppers today are more concerned with buying basics like milk and bread than electronics and apparel, many of which are foreign-made, and the retailer is shifting focus to keep up.
“Consumers have been shopping more for ‘needs’ than for ‘wants,’ and that’s why groceries are still the number one thing in their budgets,” said Craig Johnson, president of independent consulting firm Customer Growth Partners. “In return, Wal-Mart has become a needs-oriented store.”
Walmart’s crushing the competition, with higher sales than Kroger, Safeway, and SuperValu grocery chains combined. Its house “Great Value” brand boasts the biggest sales of any food brand in the U.S. To assert its dominance in the grocery sector, Walmart “leverages its scale” so its suppliers can pay lower prices to farmers, as investing site Trefis reports — which is bad news for small farmers across the country. Sure, god made a farmer, but god also made an American profit motive. From NPR’s The Salt blog:
Wal-Mart claims its emphasis on local has saved customers over $1 billion while helping farmers. But Wyatt Fraas, of the Center for Rural Affairs in Lyon, Neb., would like to see those benefits and cost savings broken down.
“Unfortunately, there’s so little definition and transparency about how that happens that we don’t really know if that happens or how that happens,” he said.
Of the eight farms highlighted on Wal-Mart’s locally grown web site, five are very large farms by the U.S. Department of Agriculture’s definition, with annual sales in the millions of dollars.
Walmart’s claim that it supports small-scale farmers just doesn’t add up. One of the retail behemoth’s suppliers says that all farms, big or small, “have to modify their operations” if they want to succeed in this new age of Walmart groceries.
But LaDonna Redmond, a senior policy associate with the Institute of Agriculture and Trade Policy in Minneapolis, says it’s a slippery slope.
“That’s the question: Will it actually benefit [farmers], or will the situation turn out to be one where the benefit really is transferred to Wal-Mart?” Redmond says.
Oh come on, NPR, you don’t need to he-said she-said on this one. We know who benefits: Walmart sold $244 billion of groceries last year.
Finally, there’s this greasy little nugget: While Walmart is claiming a new allegiance to local foods and sustainability, it’s also adding more fast-food franchises to its stores. Take that, small farmers.