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Monday, December 5, 2011

Strategic CSR - Walmart

There are three aspects of the article in the url below that I find interesting. First, is that Walmart is changing its grocery supply chain to purchase more locally-grown foods. The move carries the advantage of meeting consumers’ growing demand for local food, but is primarily an attempt to reduce transportation costs:

This summer, Wal-Mart has lined up farmers to grow jalapeƱo peppers in 30 states, twice as many as last summer. A decade ago, almost all of the chain's hot peppers came from Florida, California and Mexico. "We can get chili peppers from Florida all day long, but at the end of the day that is not necessarily the best model for us," says Darrin Robbins, Wal-Mart's senior manager for produce. "I'm going to pay a higher price in Ohio for peppers, but if I don't have to ship them halfway across the country to a store, it's a better deal."

Second, is that loose definitions of sustainability-related terms (such as “organic,” “natural,” and “local”) allow firms to maximize the PR value they get by presenting foods in ways to which consumers respond positively. It also, of course, raises the possibility of greenwash (Chapter 4, p108):

At most large retailers, fruits and vegetables harvested hundreds of miles away can be touted as locally grown. Such loose definitions have sparked criticism from small farmers and organic-food advocates that the chains are merely adjusting their marketing to capitalize on the latest food trend, rather than making real changes in their procurement practices. Wal-Mart … encourages its managers to buy produce grown within 450 miles of its distribution centers, even if local peaches, for example, cost more than those produced across the country in California.

And, third, is that, although Walmart changed its logo in the summer of 2008 in a chain-wide re-branding effort, newspapers continue to refer to the firm as Wal-Mart with a hyphen (rather than Walmart). I find the inertia fascinating and can imagine it drives Walmart’s executives nuts. In relation to CSR, it brings to mind firms like Nike, which many people still think of as a non-socially responsible firm, even though (like Walmart) it is now leading best practice in many aspects related to CSR.