#6 story of 2009: Wal-Mart raises questions with prices, perishables management

01/04/2010 12:16:05 PM
Dan Galbraith

Leadership changes at Bentonville, Ark.-based Wal-Mart and the company’s efforts to expand its fresh produce market share pushed it into the No. 6 spot in the list of top newsmakers of 2009.

Not only did 42% of The Packer’s Produce Pulse survey respondents in November say the “Wal-Mart effect” is growing, but they also said Wal-Mart’s buying power and management changes in 2009 made it the most important company-related fresh produce news story.

Wal-Mart’s produce department leadership, as well as the fact that its effect on produce at retail is almost sure to increase in 2010 if the economy remains weak and consumers go bargain hunting or trade down, make it a factor to constantly keep tabs on.

Wal-Mart selected Manolo Reyes, a veteran with Issaquah, Wash.-based Costco, to succeed Ron McCormick as vice president and divisional merchandise manager of produce and floral, hinting at a new direction.

McCormick reportedly shifted to a new position with the company, dealing with sustainability and locally grown initiatives.

Dick Spezzano, an independent retail analyst and president of Spezzano Consulting Services in Monrovia, Calif., said Reyes came from a Costco location in Mexico, and that with his appointment, Wal-Mart might be trying to improve its Hispanic consumer relations when it comes to perishables.

“That’s why nobody knows who this guy is,” Spezzano said.

“Wal-Mart — not just Wal-Mart, but all supermarket chains here — are slow to market to a Hispanic audience. When you compare them to independent retailers on the grocery side, they fall short, especially where independents are big in produce.

“Maybe this guy will bring more to Wal-Mart in what to bring to its Hispanic customers. I think he’ll bring a lot of his knowledge in the Hispanic consumer with him. He should be a great teacher on that,” Spezzano said.

In March, Wal-Mart greeters got a new greeting for shoppers at two remodeled stores that opened this summer — “Hola, bienvenido a Wal-Mart.”

Wal-Mart remodeled two of its Neighborhood Market stores and opened them under a new Hispanic-themed banner, Supermercado de Wal-Mart.

“As a part of our store refresh program this year, we are converting two existing Neighborhood Markets — one in Phoenix and one in Houston — to better serve the diverse needs of the local community,” said Amy Wyatt-Moore, public relations and brand reputation manager for Wal-Mart.

Wal-Mart grabbed headlines for a variety of other reasons in 2009 as well:

In October, Wal-Mart’s 39-cent bananas raised analysts’ queries.

Wal-Mart’s attempt to widen the gap between its prices and its competitors’ by lowering prices on thousands of items, including fresh bananas, made some analysts nervous about how banana suppliers were going to handle the change.

The Associated Press called Wal-Mart’s tactic a price war, saying the company’s buying power allows it to undercut rivals.

In August, Wal-Mart announced plans to buy apples directly from growers.

One Washington apple industry source, speaking on condition of anonymity, said Wal-Mart is opening a buying office in Yakima to command all buying functions.

Maureen Royal, director of sales for CF Fresh, Sedro-Woolley, Wash., said there are rumors that Wal-Mart will locate its office at a Yakima packing shed.

“(Wal-Mart people) are coming in and going more direct with growers,” she said. “They look to that so they can take the middle person out.”

Over the summer, Wal-Mart encouraged sustainability.

In May, Craig Herkert left his job as president and chief executive officer of Wal-Mart of the Americas to serve as chief executive officer for Minneapolis-based Supervalu Inc.

In April, a Salinas, Calif. ban on Wal-Mart irked produce companies.

In February, Wal-Mart announced plans to double its share of the Massachusetts supermarket business over the next year.



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