Suppliers benefit from Wal-Mart sourcing goals

From The City Wire - www.thecitywire.com

Officials with Wal-Mart Stores announced earlier this year a plan to source an additional $50 billion in products from the U.S. during the next 10 years. The company said Wednesday (June 5) it is still focused on the goal, with a company in Fort Smith a beneficiary of the effort.
Hal Sirkin, a senior partner with Boston Consulting Group, said the initiative will mean an additional 100,000 U.S. jobs if Wal-Mart is successful.

Michelle Gloeckler, senior vice president of Walmart home, told the media Wednesday afternoon that the retailer is making “great strides” since the initiative was announced earlier this year. She said two-thirds of the products in Walmart U.S. stores are already sourced from the U.S.

Gloeckler highlighted local candle maker Burt Hanna of Fayetteville as one of the existing U.S. suppliers who worked with Wal-Mart on this initiative.

Growing business with existing suppliers is one of the three ways Gloeckler said Wal-Mart will achieve its goal.

Hanna told The City Wire he employs 150 people in his Fayetteville operations and has been manufacturing candles, mostly private label (Mainstay) for Wal-Mart for several years. He said since Wal-Mart has expanded its efforts to source locally, his sales have increased.
Gloeckler said candle sales have risen from $4 million annually to $30 million, and she credits the buyers who are seeking out the opportunities with local suppliers.

Michael Rothbard, CEO of Authentic Comfort, said his firm manufactures memory foam toppers for Wal-Mart, which is 20% of Wal-Mart’s business in this product. He said all the product materials are sourced in the U.S. including chemicals from Peterson Chemical Technology in Fort Smith.
Rothbard said the company’s products are made in Georgia and California and support jobs there as well in other areas such as Fort Smith. He said U.S. manufacturing is more responsive to customer demand and is becoming more feasible for several industries.

 

Gloeckler said prior to offering the product from Comfort Sleeping, all of the form toppers sold at Wal-Mart were made in China. Rothbard said he had to prove he was able to provide quality and competitive prices. He said Wal-Mart rolled back the price by $10 on the product, added a “Made in the U.S.” tag on it, and sales are up double digit this year over last.
Sirkin said with inflation driving labor costs higher in China, more industries are finding they can be competitive using U.S. manufactured products.

 

“Overseas manufacturing is no longer the default option. Product coming from China is on the water 2.5 to three months,” Sirkin said.

 

Gloeckler said Wal-Mart is committed to U.S. sourcing because it just makes sense. She said some studies show consumers will actually pay more for a “Made in America” tag, “but we don’t they should have to.”

Wal-Mart Offers Money Back Guaranty on Produce

 

 

By Jessica Wohl

 

(Reuters) - Wal-Mart Stores Inc said on Monday it is offering a money-back guarantee on the fruits and vegetables it sells at its Walmart U.S. stores as it tries to gain more ground in the grocery business.

Walmart is the largest grocer and seller of produce in the United States. It has already lowered prices on produce as it tries to get its shoppers, many of whom are on limited budgets, to buy more healthy fare. Now, it is working on getting fresher produce to its stores more quickly and training its staff to do a better job of selling the goods.

Walmart is able to cut the time it takes to get produce into stores by buying directly from growers and relying on its own distribution centers and trucking systems. It has produce experts working with farmers in key growing regions and aims to double its sales of locally grown produce by December 2015.

Buying more local produce and cutting supply chain costs have helped Walmart keep a lid on prices, which has been key in its push to stay ahead of rivals that include traditional grocers such as Kroger Co and drugstores such as Walgreen Co. Walmart started to see sales gains in produce earlier this year after it began making improvements in produce handling.

Other chains, such as Safeway Inc and Texas' H-E-B, have already offered guarantees on their produce, but Walmart's push will be the biggest as it is the nation's biggest retailer.
Walmart customers not satisfied with the produce can bring their receipt back to the store for a refund. Walmart said the shoppers will not need to bring back the produce to qualify.

To ensure that fresh produce makes it to the stores, Walmart said unnamed third-party service providers will do weekly checks in more than 3,400 of its stores selling produce. Walmart said it would benchmark itself and its competitors week over week.

Walmart also said it recently began a produce training program for 70,000 employees. Store managers, market managers and produce department managers are set to learn more about handling fruits and vegetables. Quality guides for workers will illustrate how to identify top produce, the company said.

Grocers, restaurants and food makers are under pressure from consumers and public health officials to sell more healthful food in an effort to address the nation's obesity crisis. More than two-thirds of adults and nearly one-third of youth aged 2 to 19 are overweight or obese, according to the Centers for Disease Control and Prevention.

Food is a huge business for the world's largest retailer, which has been lowering prices, along with its healthier makeover, to boost sales. Groceries, from food and drinks to cleaning products, accounted for 55 percent of Walmart U.S.'s $274.5 billion in sales in the latest fiscal year.

(Reporting by Jessica Wohl in Chicago; editing by Gunna Dickson)