WalMart and Healthy Food

A New York Times article (January 20, 2011, B1) described WalMart’s announcement to lower salt, fat and  sugars in packaged foods and decrease prices of fruits and vegetables over the next five years. Specifically the company plans to reduce sodium by 25 % and added sugars by 10 % by 2015. The foods affected include rice, soups, beans, salad dressings and chips – all sold under WalMart private label brands.  The article claims that WalMart will hold prices and decrease their own margins, with increased demand permitting them to maintain profits.  Will unilateral action by a large retailer cause consumers to adjust their food preferences ? Will the proposed reduction of fruit and vegetable costs by $ 1 billion a year come from reduced retailer margins, leveraging of volumes with suppliers  or increased demand at the lower price points ? Will such a strategy provide additional competitiveness to WalMart ?

About aviyer2010

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