Morning News Beat Walmart Watch
March 19, 2013 Leave a comment
By: Kevin Coupe
• Business Insider reports that Citi analyst Deborah Weinswig is saying that Walmart management seems to be focused on its Made in the USA initiative, and that this effort could lead to improved profitability.
An excerpt: “While global sourcing remains a significant source of EDLC opportunity, we believe that the $50B commitment to increase domestic sourcing over the next decade should benefit topline and profitability at WMT U.S.
“Domestic sourcing will help the company avoid wage inflation overseas and shipping costs, while increasing flexibility through shorter lead times and generating positive reputational buzz. WMT U.S. kicked off the initiative this week with Georgia state sourced towels, priced at $8.97 for bath size. They are offered in 600 stores and will be in an additional 600 stores by Sept., supported by local marketing.”
KC’s View: I do have a bit of a dog in this hunt, since one of MNB’s longtime sponsors offers certification of Made in the USA products. But I was a big proponent of such programs long before this company began sponsoring MNB, so I don’t feel like I have any apologies to make.
I think you are going to see a lot more of these programs, because Made in the USA increasingly will be seen as an advantage for marketers. You have to do it right, you have to be credible, and you can’t take shortcuts. But it makes a lot of sense … and I don’t think it is hard to imagine Amazon having a Made in the USA section, for example … which may be enough for Walmart to do it.