The United States Of Wal-Mart And Corporate Responsibility

It’s been called the 800 pound gorilla that you don’t want to mess with. It’s been accused of taking customers from small, neighborhood stores and hurting communities. It’s been accused of predatory pricing, anti-union fervor and paying its employees less than a living wage. It’s been called the United States of Wal-Mart because of its massive control of the American retail scene.

But in the past several years, Wal-Mart also has been going through a major transformation and committing itself to progressive policies in the realm of corporate social responsibility, particularly when it comes to the products it sells and major efforts to promote energy conservation.

The latest initiative that Wal-Mart announced last week, is a five year plan to reduce unhealthy levels of salts, fats and sugars in thousands of its packaged foods and to lower prices on healthier products such as fruits and vegetables.

Wal-Mart is pledging to reduce salts by 25-percent, to eliminate industrially added trans fats and to decrease added sugars by 10-percent. The company also is planning to develop a seal that will be placed on healthier foods, rating those products by their levels of sodium, fat and sugar content.

The massive company, with 8,500 stores in fifteen countries, is the world’s largest corporation by revenue with over $400 billion in sales for 2010. Wal-Mart is planning to use its enormous purchasing clout to force food suppliers such as Kraft, whose total Wal-Mart sales amount to roughly 16 per cent of its business, to make its foods healthier as well.

The changes will not occur overnight. In fact, they will be gradually phased in by 2015 so the company can overcome technical issues and to give its customers an opportunity to alter their eating habits.

This is just the latest major initiative undertaken by the Bentonville, Arkansas goliath. A little more than five years ago, Wal-Mart announced it would implement a host of environmental measures to increase energy efficiency.

The energy initiative included spending $500 million a year to increase fuel efficiency in Wal-Mart’s truck fleet by 25% over three years, to decrease greenhouse gas emissions by 20% in seven years, to reduce energy use at stores by 30% and to cut solid waste from U.S. stores and Sam’s Clubs by 25% in three years. Wal-Mart’s philanthropic agency is donating $2 million to food banks around the country to fund energy-efficiency programs.

And back in 2006, Wal-Mart announced a program to sell generic drugs at just $4.00 per prescription saving consumers millions of dollars. Wal-Mart maintains it still makes a profit on pharmaceuticals and is able to do that by the sheer volume of sales.

Wal-Mart is cognizant that consumers are demanding healthier foods, cheaper prescriptions and are more concerned about global warming and greenhouse gases. The company also realizes there are profits to be wrung out of reducing the energy consumption at its stores, using less fuel in the transport of its products, producing goods in a more efficient manner and creating less waste.

Through forging these initiatives, Wal-Mart has figured out a formula to be a good corporate citizen, give consumers great bargains and still make tons of money; $14.3 billion in profits in 2009. It is the consummate win-win-win.

Another upside to Wal-Mart’s moves are that its competitors, companies like Target, K-Mart, Sears and Costco will be forced to follow suit or they will not be able to maintain competitive pricing which would result in the loss of market share to the already gargantuan Wal-Mart.

Of course the company still confronts many negative criticisms. There are estimates that 70% of its employees reportedly leave the company within the first year because of low wages and a poor work environment. Can Wal-Mart, with close to two million employees worldwide, do better on the wage and benefit front with its workers?

Are massive box stores with acres of parking lots really where Americans want to shop? Is there a way of building supercenters without crushing small retailers? As Wal-Mart travels down the corporate social responsibility highway, it must do a better job of melding into communities.

Let’s hope Wal-Mart continues to undertake positive initiatives for the American consumer and the environment and also makes greater strides in compensating its workers and becoming a better neighbor in the communities where it operates.

Let us also hope that Wal-Mart works just as hard to attain a solid reputation abroad as it expands its operations globally.