Once Again, Walmart Shows the Way

August 3, 2011

From June to October, the fruits and vegetables my family eats are supplied almost exclusively by a local organic farmer. His bounty is enormous; we enjoy everything from kale to blueberries, all picked the same day.

Given the climatic zone we live in, I’m under no illusions that local farming could sustain us all year round. For much of the year, our choices would be limited to stored cabbage, carrots, onions, turnips potatoes, and apples. If that sounds like the produce choices our ancestors faced a century ago, you’re right. I’m very grateful for our modern agricultural system that supplies reasonably high quality produce all year round.

At the same time, I occasionally worry about disruptions to the food supply chain as it has become far too centralized.  This centralization is due, in large part, to Federal government agricultural and water subsidies.

In recent years, consumers have become interested in locally grown food and most are not fortunate enough to live nearby an organic famer. Walmart is ready to help fill the void.

According to the Wall Street Journal, “the largest grocer in United States [Walmart] encourages its managers to buy produce grown within 450 miles of its distribution centers,” even if the locally grown produce costs more than California produce. True, Walmart is responding to shifting consumer preferences, but also, the big box giant has determined that locally grown produce reduces spoilage and saves on transportation costs.

Notice there was no government commission necessary to encourage Walmart to switch to locally grown produce. Congress is not subsidizing Walmart to switch to a locally grown produce. Walmart, motivated to serve the best interests of its consumers, has begun to switch quietly and efficiently.

Of course, in the eyes of many, Walmart can do nothing right; critics insist that Walmart is simply recognizing a marketing opportunity rather than doing anything different.  If you are a Walmart cynic or a Walmart basher, you might find Corby Kummer’s piece in The Atlantic to be an eye-opener: The Great Grocery Smackdown: Will Walmart, not Whole Foods, Save Small Farms and Make U.S. Healthy? Here is an excerpt:

Buy my food at Walmart? No thanks. Until recently, I had been to exactly one Walmart in my life, at the insistence of a friend I was visiting in Natchez, Mississippi, about 10 years ago. It was one of the sights, she said. Up and down the aisles we went, properly impressed by the endless rows and endless abundance. Not the produce section. I saw rows of prepackaged, plastic-trapped fruits and vegetables. I would never think of shopping there.

Not even if I could get environmentally correct food. Walmart’s move into organics was then getting under way, but it just seemed cynical — a way to grab market share while driving small stores and farmers out of business. Then, last year, the market for organic milk started to go down along with the economy, and dairy farmers in Vermont and other states, who had made big investments in organic certification, began losing contracts and selling their farms. A guaranteed large buyer of organic milk began to look more attractive. And friends started telling me I needed to look seriously at Walmart’s efforts to sell sustainably raised food.

Really? Wasn’t this greenwashing? I called Charles Fishman, the author of The Wal-Mart Effect, which entertainingly documents the market-changing (and company-destroying) effects of Walmart’s decisions. He reiterated that whatever Walmart decides to do has large repercussions — and told me that what it had decided to do since my Natchez foray was to compete with high-end supermarkets. “You won’t recognize the grocery section of a supercenter,” he said. He ordered me to get in my car and find one.

Indeed, if locally grown and organic food is to reach those struggling on a tight budget, it will be Walmart, not Whole Foods, that shows the way.

Consider, too, Walmart’s low prices on clothing. All over the country this fall, children of families who are financially strapped will go off to school with clean, new, inexpensive clothes purchased from Walmart. And if you think this is trivial, put yourself in the place of parents working hard to feed and clothe their children. The savings Walmart provides over department store clothes is enormous; and for some children, it’s the difference between being adequately clothed and being teased or bullied for being shabbily dressed. It is Walmart, not its critics, who is clothing these children at risk.

Next, consider Walmart’s employment practices. Contrary to popular belief, Walmart raises the wages of low skilled workers. Why?  When Walmart comes to town, it is an instant source of demand for workers who have minimal skills. Far more jobs are created then are lost for these workers; and since Walmart increases demand for these workers, wages go up too. Again, it is Walmart, not its critics, who employs those workers who have few other employment opportunities.

If that was all Walmart did, well, we would have much for which to be grateful. But perhaps the most important thing that Walmart does well is to be one of the biggest instruments of peace in the world. While governments build armaments and start wars, Walmart trades and buys goods from all over the world. In the process of buying goods from all over the world, Walmart creates employment opportunities and helps grow wealth in previously impoverished countries. Nations with fast growing economies have little incentive to wage war, especially with their trading partners.

This blog piece may be ludicrous to many who claim to fight for the social good and whose heroes are in Congress and in academia. To them, Walmart is a terrible scourge. Reality points us in another direction—but the reality of the marketplace means little to those who think our salvation lies in centrally-planned solutions to our very real economic problems.


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