Walmart is to embark upon a five-year plan to make its food offering healthier.
It has announced thousands of Great Value private-label SKUs, including rice, soups, canned beans, salad dressings and snacks, will have salt, fat and sugar levels reduced, while fruit and vegetable prices will be lowered. Walmart is pledging to reduce sodium by 25%, eliminate industrially added transfats and reduce added sugars 10% by 2015.
It is estimated that a third of all Americans adults - about 74 million people - are obese. The trend of rising obesity has been leveling off in recent years but without doubt there is an increased pressure on Americans to lead a healthier lifestyle and the country’s leading retailer to set an example. The initiative is part of five-year plan that is backed by Michelle Obama, a significant coup for the retailer that will certainly raise its profile.
A key obstacle for Walmart will be making healthy food affordable and convincing its suppliers to invest in the initiative. Walmart executive vice-president for corporate affairs Leslie Dach sees no reason why healthy food shouldn’t be affordable: “It doesn’t do you any good to have healthy food if people don’t eat it. Our customers have always told us, ‘we don’t understand why wholewheat macaroni and cheese costs more than regular macaroni and cheese’. We’ve always said we don’t think the Walmart shopper should have to choose between a product that is healthier for them and what they can afford.”
It is less clear how Walmart will achieve reducing the costs of its healthier food. It has said the five-year implementation time frame will enable suppliers to get up to speed and overcome one of their key challenges; replicating the taste of their current food offering in the new healthier version. So the onus will be on its suppliers to find ways of creating healthier solutions, while reducing costs at the same time, no easy task.
Walmart has also said it will build more stores in “food desert” locations, a term that refers to rural and underserved urban areas with a lack of stores selling fresh produce. The idea of serving the underserved is something Walmart has done successfully in Latin America. Whether the retailer is looking to do this to enhance the health of Americans or to tap into an unsaturated market is debatable. Walmart cannot change the perception or behaviour of consumers overnight but it is making a step in the right direction, let’s see if others follow its lead.
Greg Hodge, research director, Planet Retail.
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