Looking out for Number One

Wal-Mart didn't get to be number one by sitting on their hands. Here are couple of stories that highlight the fact that Wal-Mart is looking for inroads in health care and international markets, not to mentioning fending off would be rivals in the grocery business. What's more, not all stock analysts are bearish about Wal-Mart.

From The Salt Lake Tribune:
For Wal-Mart Stores Inc., the road to a higher share price is paved with chicken feet and Spam. The world's largest retailer, long the biggest importer of goods into the U.S., last year joined a list of the top 100 U.S. exporters for the first time. It sent 39 percent more shipping containers overseas than General Motors Corp., and surpassed cigarette maker Altria Group Inc. Although only a fraction of the $18 billion in goods it bought from China alone in 2005, exports will increase further as Wal-Mart targets a third of its sales growth from abroad amid the slowest gains at U.S. stores in at least 27 years. International sales will expand to 30 percent of Wal-Mart's total in 2010, up from 22 percent last year, estimates Citigroup Inc. analyst Deborah Weinswig. International markets ''could be like a savior for Wal-Mart,'' said David Abella, an analyst at Rochdale Investment Management in New York, with $2.4 billion in assets including Wal-Mart shares. The expansion may help end the seven-year stock slump for Wal-Mart. The shares will rise 29 percent in the next 12 months, says Weinswig. She is top-ranked by Institutional Investor and rates the stock ''buy.'' Since reaching a record $69.44 in December 1999, the per-share price has dropped by a third. Wal-Mart will report quarterly financial results Aug. 14. The stock trades in the $45 range.

From The Wall Street Journal, reprinted online at JournalNow:


Twelve years ago, Wal-Mart Stores Inc. executives welcomed Terry Leahy to the company’s headquarters in Bentonville, Ark.
Leahy, newly promoted at Tesco PLC and considering an overhaul of the British retailer, spent an afternoon discussing operations with Wal-Mart executives.
Today, Wal-Mart is doing everything it can to stop Leahy from crashing its last big growth business: groceries. It has a team of executives hunkered down far from Bentonville in the San Francisco Bay area devising two new small-footprint stores, including a response to the November launch of Tesco’s U.S. grocery stores, according to people familiar with the group.
Their brainchildren represent an unlikely step for staid Wal-Mart: One idea calls for urban convenience stores less than a tenth of the size of the company’s supercenters and stocked with groceries geared to more affluent tastes. Another plan calls for stand-alone stores offering a variety of health services and products. The new outlets are being prepared for introduction early next year.
David Wild, the Wal-Mart senior vice president of new business development, is leading the initiatives. He declined to comment. A Wal-Mart spokesman wouldn’t provide specifics but said, “Our business is constantly evolving, and we’re always looking for new and innovative ways to serve our customers.”
The company may have waited too long to develop successors to its big-box U.S. stores. Analysts now chopping their profit estimates for this and next year say that Wal-Mart has seemed tone-deaf to consumer trends. Failed pushes in women’s fashions and home decor continue to sap profits, and high gasoline prices are eating into supercenter visits. Recently, Wal-Mart has tried running ads promoting its low prices as worth the extra travel.
Nonetheless, the smaller stores could help Wal-Mart do more than fend off Tesco. The retailer has been largely shut out from upper-income and urban markets, including those in California and New York. High land costs and local opposition have limited the discounter to just 28 supercenters in California, a tenth of the number in Texas. Smaller stores are less likely to stir up opponents than the hulking 200,000-square-foot big-box stores.
In health care, Wal-Mart sees itself providing an array of services and home-health equipment along with the prescription eyeglasses and pharmaceuticals that it already sells, according to a person familiar with the effort. “In five years, Wal-Mart wants to be on its way to becoming the No. 1 health-care company in America,” that person said.

Zogby COOL Poll

Here is the link to the Zogby poll summary regarding country of origin labeling.
The survey was released Aug. 9. From the Zogby report:

Survey shows 90% believe knowing the country of origin of the foods they buy will allow consumers to make safer food choices
As food recalls – from both imported foods from overseas and foods produced here in the U.S. – continue to make headlines, Americans may be paying more attention to where their food comes from. Nearly three in four (74%) say it’s important to them to know the country of origin for the all types of products they buy, but even more – 85% – say knowing where their food comes from is important. But for the vast majority of Americans it’s about more than just wanting to know – 94% believe consumers have a right to know the country of origin of the foods they purchase, a new Zogby Interactive poll shows.

TK: We love our consumers, and more than 9 out of 10 think that knowing country of origin labeling is their God-given right.

Just knowing what country a food comes from is no guarantee it will be safer than a food produced in the U.S., but nine in ten (90%) believe knowing the country of origin will allow consumers to make safer food choices. One of the components in this year’s Farm Bill deals with expanding country of origin labeling beyond seafood to include meat, produce, and other foods and is currently under consideration by Congress. Most Americans strongly favor mandatory labeling – 88% say they would like all retail foods to be labeled this way. This requirement is most supported by older adults, but significant majorities in all age groups said they would support this country of origin labeling effort.
But wanting to know and going out of their way to check where a product comes from are two different things. Checking the country of origin seems to be on the minds of consumers at least some of the time – 37% said they check most of the time and 34% said they check occasionally. While 11% said they always make sure to check to see where a product comes from, 15% rarely do and 4% never check.
Despite overwhelming support for labeling, 5% disagree with mandatory country of origin labeling for foods. Of those, nearly two-thirds (63%) said compliance would be too costly and it would drive up food prices. Another 27% said it doesn’t matter what country food comes from that is sold in the U.S., and 2% believe such labeling could be unfair to foreign competitors. Many food shoppers (70%) said they are willing to pay more for produce, poultry, meat, seafood and other food products if they were from the U.S. But how much are shoppers willing to pay to know their food doesn’t come from a foreign country? One in three (34%) would pay up to 10% more for U.S. food and nearly half (46%) would be willing to pay from 10% to 25% more. Just 11% would be willing to pay 25% or more for U.S. foods over cheaper imported foods.

TK: If consumers will pay more for U.S.-grown produce, will retailers? The first reality would seem to support the second.

Not everyone is so willing to pay more for food just because it doesn’t come from outside the U.S. – 15% wouldn’t be willing to pay more for food from America. Of those, 38% said they wouldn’t be willing to pay more because cost is the most important factor in making their food choices, while another 27% said it doesn’t matter what country the food they buy comes from.
These findings are included in the August issue of Zogby’s American Consumer newsletter, which focuses on how Americans feel about imported goods, product safety, food labeling and many other issues and is available now at www.zogby.com. The Zogby Interactive survey of 4,508 adults nationwide was conducted July 17-19, 2007 and carries a margin of error of +/- 1.5 percentage points. Other findings from the online survey include:
90% of Americans want the U.S. Food and Drug Administration to hire additional inspectors to increase inspection of food imports
96% said they take recall warnings seriously.
Most Americans (67%) are satisfied with how the U.S. government gets the message out to the public about recalled products, but 30% believe the government’s efforts are lacking.
Overall, nearly half (48%) said they don’t know where the majority of the vegetables, fruits and nuts they consume originate.
While nearly two-thirds (65%) of American adults said they go out of their way to buy local produce and other food products, 32% said it isn’t a priority.

TK: There is a disconnect between the country of origin labeling offered by retailers and suppliers and consumer awareness. Could it be that PLU labels that offer country of orgin info are put in type that is too small to read? Does anyone else find it surprising that 65% of Americans go out of their way to buy local? That's a big number. Again, there may be a gap between what people say they do and how they actually behave.

Giving truckers a voice at the table

Land Line magazine, the official publication of the Owner Operator Independent Drivers Association, published an online article Aug. 17 that once again raises concern that truckers are being left out of the food safety discussion. From the story:

Before last fall’s spinach E. coli outbreak left 200 people ill and three dead, spinach was seen by many as the perfect food – high in vitamins and nutritional value – and also a steady source of income for produce haulers who depend on the high demand for leafy greens grown in the Salinas Valley.
With the anniversary of the Sept. 14, 2006, E. coli outbreak looming less than a month away, it seems that everyone in the food safety debate is still scrambling to find answers to ensure that something like that doesn’t happen again.
Trevor Suslow, microbial food safety specialist at the University of California-Davis, said he agrees truckers should be included in food safety discussions because of their important role in getting the product “from farm to fork.”
Suslow is serving on the advisory board for the new Center for Produce Safety, located on the UC campus at Davis. The new center was established by the produce industry in response to last year’s E. coli outbreak. Suslow said transportation, distribution and logistics will be part of his extension research.
“I have always recognized the importance of including transportation if there is really going to be a complete food safety program from seed to shelf or from farm to fork, as they say,” he said.
“Unfortunately, I don’t know of any association or national advocacy group that is currently looking out for the interests of people hauling fresh produce or any other perishable or potentially hazardous foods and really participating in the development of all of this.”
Stepping into the void, the Owner-Operator Independent Drivers Association has issued comments with the California Department of Food and Agriculture and has testified before the FDA on behalf of its members who were left “holding the bag” when they had contaminated bagged spinach on their trailers and didn’t know where to take it or what to do with it.
Some receivers refused to accept the contaminated product, some weren’t paid for the pallets of spinach and others weren’t reimbursed for their dumping or tipping fees associated with finding a landfill or dump to dispose of the product.
OOIDA Regulatory Affairs Specialist Joe Rajkovacz, who hauled produce out of the Salinas Valley for more than 20 years, said the time is ripe for OOIDA to step in and help develop a fair and workable food safety plan that represents truckers as being an integral part in the food supply chain.
Many truckers were left holding the bag literally and financially after the outbreak and, for the most part, are still being left out of discussions on ways to make improvements in the food supply chain, Rajkovacz said.

TK: I'm not sure what other specific measures Land Line is advocating. I don't buy that truckers have been excluded from the discussions, but I would like to see more specifics from truckers as to what they think is needed to more fully account for their interests.