Wal-Mart's new food strategy

In the world of commerce, Wal-Mart is a phenomenon unto itself. In 15 countries, it attracts 200 million visitors a week to more than 8,700 stores, where they can buy practically everything. Its sales volume — more than $400 billion — is bigger than the GDP of Austria.

Since its first store opened in 1962, Wal-Mart has followed the philosophy of selling its goods at lower prices than its competitors. Over time, this has driven smaller, privately owned stores and even entire shopping malls out of business.

The low prices come mostly from an economy of scale, but are facilitated by two other factors. First, almost all of the manufactured goods sold at Wal-Mart are made in China. If Wal-Mart were a country, it would be China's eighth-largest trading partner. Second, Wal-Mart goes to great lengths to discourage and even prevent its American employees from forming unions, in order to keep wages low.

Hundreds of thousands of female employees in the United States say that Wal-Mart has systematically discriminated against them in pay and promotions. The Supreme Court will hear their case on March 29.

To most Americans, low prices are much more important than patriotism or fair labor practices. Low prices are even more important to consumers than their own health. The cheapest packaged foods — sold anywhere — tend to have less nutritional value than more moderately priced items. People buy whatever's cheap, and if they can afford it, they often buy more of something because it's cheap.

Better food choices?

Well, Wal-Mart sells more groceries than any other company in the US — and now it's made a very interesting announcement. In its store brand, the retailer will reduce sodium content by 25 percent, reduce added sugars by 10 percent, and remove all industrially produced trans fats in steps by 2015. It will put pressure on big-name brands to do the same. It will reduce its profit margin in order to offer more affordable fruits and vegetables and eliminate the price difference between healthier foods, such as whole-grain products, and less healthy items.

As part of this plan, Wal-Mart will build stores in urban areas that have few or no supermarkets. This will put healthier food within reach of the poor, the company says.

First Lady Michelle Obama has offered her support to this initiative, as it dovetails with her program to fight childhood obesity.

This finally appears to be a win-win situation, given that millions of people are going to shop at Wal-Mart anyway. For Wal-Mart, it means attracting more customers and expanding into areas where it's not present. For buyers, it means slightly healthier food.

I say "slightly" because, to produce a noticeably healthier population, the added sugars would have to be cut by 50 percent or, better, 100 percent. Wal-Mart says it will take five years for consumers to get used to the idea. Their reaction will certainly be worth watching.