Saturday, January 20, 2018
Business

Walmart puts new emphasis on fresher, quality produce

By emphasizing higher-quality fruits and vegetables at affordable prices, Walmart wants to democratize healthy eating. Analysts say the retailer also may be angling for more frequent shopping trips by consumers.

The Bentonville, Ark., chain said this week that it has reorganized its produce business to improve quality and freshness by relocating experts from its corporate headquarters to major growing regions to ensure quality, and streamlining produce's path to stores.

Walmart, the nation's largest grocer, is a frequent target of attack by critics. The company is building on a 2-year-old promise to offer more healthy foods in stores, make fresh food more widely available, and healthier options more affordable.

"We don't think there's any place for people who want to eat healthy to have to pay more for their food," said Jack Sinclair, Walmart's executive vice president of food.

Sinclair added that Walmart had "cut out the middleman" in produce, shipping it directly to distribution centers, and saving a day in transit. Walmart also trained 70,000 employees in an effort to maintain better-looking fruits and vegetables, pulling items that don't meet its standards, he said.

Walmart will run a national advertising campaign to garner awareness for the guarantee. Customers who don't like their produce can return it to the store for a full refund, "no questions asked," Sinclair said. "Just bring the receipt."

The company will be shopping at local competitors weekly to get a sense of offerings at other stores.

Although the move is clearly significant for Walmart, it doesn't appear to be ground breaking in the grocery industry.

Jim Hertel, managing partner at Willard Bishop in Barrington, Ill., estimated that Costco began deploying its produce experts to farms eight or more years ago.

"Produce is one of the two departments that will determine where shoppers will go," he said. "If you're anybody but a pure rock-bottom (price) shopper, the quality of meat and produce is really important."

That's an area where "Walmart has been behind the eight ball for a long time," Hertel said.

And although the discount chain is well-known for its low prices on nonperishable items, it's less of a destination for quality produce. Building those credentials, Hertel said, will be critical to getting more frequent visits.

Although it's easy to shop for paper towels quarterly, "You can't pantryload on strawberries," Hertel said.

Last month, Walmart cited produce sales as a bright spot in an otherwise grim first quarter in its U.S. business.

"We've improved our process for handling and culling produce, allowing us to get the freshest assortment in front of our customers," Bill Simon, CEO of Wal-Mart U.S., said.

Sinclair said Monday that Walmart now sources produce in all 50 states. He said Walmart has seen shoppers make healthier choices as prices for healthier items reach parity with less healthy options.

"We want to make sure price is not a factor in that choice," he said.

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