Wal-Mart returns to 'Buy American' roots?

NEW YORK (CNNMoney) -- Wal-Mart's CEO, Mike Duke, shocked an industry gathering recently when he said a majority of the retailer's products are now made in the United States.

Wal-Mart's founder Sam Walton started the company as a "Buy American" retailer some 50 years ago but it turned away from that strategy in the name of offering cheaper prices. Lately however, Wal-Mart shoppers are focused on buying basics like groceries, which often come from the U.S. They're not really spending on other goods, like foreign-made electronics and clothes the discounter used to be known for.

So the retailer is adapting.

It's no longer the destination of choice for cheap T-shirts and televisions. It's now mainly a huge supermarket where shoppers are loading up on fruits, vegetables and household products produced in the U.S. Wal Mart says 54% of its total sales currently come from groceries and household goods such as detergent and paper towels. And most of those goods are American-made, said Wal-Mart spokesman David Tovar.

At the same time, the retail giant's dependence on foreign-made general goods is shrinking.

Just 7% of its sales last year came from clothes, down 1% from the prior year; 12% from electronics, also down 1% from the prior year; and 5% from home-related merchandise. These items generally come from overseas.

Scott Paul, executive director at the Alliance for American Manufacturing is skeptical. Outside of those categories, Paul said retailers, including Wal-Mart, haven't made a massive shift back to domestic suppliers.

"Wal-Mart was the trendsetter in persuading American manufacturers to outsource," he said. "It would be nice to see them lead the reshoring fad. But there's scant evidence of it yet."

Still, Paul notes a very nascent trend of some American companies pulling sourcing out of China due to rising production, labor and shipping costs.

I dunno what the truth is here. It sounds like Wal Mart may be playing with the numbers, but I do hope that Wal Mart and other companies here will begin to stock shelves with American made products again. American-made products put a lot of Americans to work.

While the title had me excited, the content of the article left me disappointed (in Wal Mart, not the journalism). It doesn't sound like Walmart has done anything to help this swing toward American made products and would be just as happy to go back to selling mostly imported crap (ie their electronics, toys, odds-and-ends).

I wish Costco would jump on the 'Buy America' bandwagon, however I don't know that their business model would allow for it (they are locked in a price war with Sam's Club, and Costco's profits/unit sold are already low due to its exemplary treatment of its employees).

Yeah, Wal-MArt probably isnt doing enough. But the thought of selling American products is exciting. At this point though, I feel like a drowning man clutching at a straw.

Bryant wrote:While the title had me excited, the content of the article left me disappointed (in Wal Mart, not the journalism). It doesn't sound like Walmart has done anything to help this swing toward American made products and would be just as happy to go back to selling mostly imported crap (ie their electronics, toys, odds-and-ends).

Well, one thing about that is that it shows that there is more consumer sentiment for home-grown goods than there was before, enough to make WalMart change direction like this. Companies like this will never do "the right thing" out of the goodness of their own hearts, they go where they think the money is. So, whether Walmart are leading or following, it's a good move either way - if the demand wasn't there, then they wouldn't have done anything and you'd all still be buying the cheap plastic chinese crap.

I try to "shop local" here as much as I can, I was at a craft fair before xmas and they were saying that for every €1 you spend on home-grown stuff, it's worth €2.70 to the local economy. Then again, if you go to the supermarket, it can be hard to find purely Irish goods as there's a pretty screwy law over here about what can/can't be called "Irish". Apparently, so long as you do some small bit of work on it in the country, it can count as Irish, so someone can bring in meat from say Poland, slap a new label on it, and call it a "Product of Ireland". So, you have to go to the small print sometimes to figure out what is/isn't actually local.

Miles1 wrote:

Bryant wrote:While the title had me excited, the content of the article left me disappointed (in Wal Mart, not the journalism). It doesn't sound like Walmart has done anything to help this swing toward American made products and would be just as happy to go back to selling mostly imported crap (ie their electronics, toys, odds-and-ends).

Well, one thing about that is that it shows that there is more consumer sentiment for home-grown goods than there was before, enough to make WalMart change direction like this. Companies like this will never do "the right thing" out of the goodness of their own hearts, they go where they think the money is. So, whether Walmart are leading or following, it's a good move either way - if the demand wasn't there, then they wouldn't have done anything and you'd all still be buying the cheap plastic chinese crap.

I try to "shop local" here as much as I can, I was at a craft fair before xmas and they were saying that for every €1 you spend on home-grown stuff, it's worth €2.70 to the local economy. Then again, if you go to the supermarket, it can be hard to find purely Irish goods as there's a pretty screwy law over here about what can/can't be called "Irish". Apparently, so long as you do some small bit of work on it in the country, it can count as Irish, so someone can bring in meat from say Poland, slap a new label on it, and call it a "Product of Ireland". So, you have to go to the small print sometimes to figure out what is/isn't actually local.

As the US is a largely agrarian nation, finding US grown food is easy so long as the food is in season. US grown is often cheaper then imported anyways due to low transportation costs.

Just read this update that fits in here quite well I think...

A curious thing is happening among American shoppers. More people are taking a moment to flip over an item or fish for a label and ask, is it "Made in the USA?"

Walmart, the nation's largest retailer, earlier this year announced it will boost sourcing of U.S. products by $50 billion during the next 10 years. General Electric is investing $1 billion through 2014 to revitalize its U.S. appliances business and create more than 1,500 U.S. jobs.

Mom-and-pops are also engineering entire business strategies devoted to locally made goods - everything from toys to housewares. And it's not simply patriotism and desire for perceived safer products which are altering shopping habits.

The recession, and still flat recovery for many Americans, have created a painful realization. All those cheap goods made in China and elsewhere come at a price -- lost U.S. manufacturing jobs. A growing pocket of consumers, in fact, are connecting the economic dots between their shopping carts - brimming with foreign-made stuff -- and America's future.

They're calculating the trade-offs of paying a little more for locally-made goods. "The Great Recession certainly brought that home, and highlighted the fact that so many jobs have been lost," said James Cerruti, senior partner for strategy and research at consulting firm Brandlogic. "People have become aware of that."

"'Made in the USA' is known for one thing, quality," said Robert von Goeben, co-founder of California-based Green Toys. All of their products from teething toys to blocks are made domestically and shipped to 75 countries.

"We are reaching a tipping point, where Americans are relearning its competitive advantage," von Goeben said. "It's not about the cheapest product, but the best quality product."Link

Ive been trying to get people to buy American for the last ten years or so. Sometimes you cant. But I always look at labels and try hard to buy American owned and more importantly, American Made products if at all possible.