Editorial: Grocery Store Wars
By Catherine Clyne
In 1991 Wal-Mart founder Sam
Walton said, “In ten years, we’re going to be the biggest
supermarket in the country.”
Guess what—he wasn’t messing around.
That might seem strange to people who don’t live anywhere near
a Wal-Mart, but the world’s top corporation has catapulted into
the position of number one grocery retailer in the country, providing
its primarily low-income rural and suburban constituents with cheap food.
Today, Wal-Mart holds an estimated 15 percent of the U.S. grocery market
and roughly eight percent of the global grocery sector. And by next year,
Wal-Mart is expected to dominate 35 percent of American grocery retail.
Since it began selling food, roughly 10,000 supermarkets have closed
While the others on the list of the top five food retailers in the country—Kroger’s,
Costco, Albertson’s and Safeway—still dominate in urban areas,
Wal-Mart’s staggering growth has put everyone on alert. Grocery
retail, one of the most cut-throat businesses in the world, is getting
even more vicious with the rise of Wal-Mart, leaving everyone scrambling
to hold on to their share of the market.
Part of Wal-Mart’s rocketing to supermarket stardom can be attributed
to its selling up to one-third fewer items than its competitors, and
not charging the usual ‘slotting fee,’ a price companies
pay to get product space on store shelves. In the New York area, that
can be $150,000 per product. As it does in the retail sector, Wal-Mart
puts the onus onto its food producers, driving prices down. With everyone
vying to be one of the 10,000 items sold in Wal-Mart, competition is
fierce. And where does Wal-Mart go for the cheapest of cheap goods? China.
Wal-Mart has an extremely lucrative relationship with China, accounting
for ten percent of the country’s exports to the U.S. That’s
right: ten percent. Meaning approximately one in ten shipping containers
leaving China with goods for the U.S. is bound for Wal-Mart. As the world’s
top grower of apples and garlic, we can expect China to be growing even
more food—to feed Wal-Mart shoppers. And those hanging in the balance
are the ones who grow our food: our farmers.
Eye on Organics
For those who don’t shop at Wal-Mart and think their business
practices don’t affect your food choices, you should think again.
Even consumers of organic and natural foods have become an increasingly
desirable target of multinational corporations.
That’s right. You’ll learn in our pages that many of the
organic and natural brands we love, like Tom’s of Maine, Rice
Dream, Boca Burgers, Knudsen juices, Gimme Lean, Yves, Silk and Jason’s
cosmetics are all owned by multinational corporations, such as Hain
Celestial Food Group (with principle stockholders like Heinz, Lockheed
Martin, Monsanto and Pfizer), Kraft/Philip Morris, Dean Foods... You
get the picture.
Getting in on the action, Wal-Mart has significantly upped its organic
product sales and is now the nation’s top organic milk retailer.
Early last month the company announced plans to double its organic
product offerings within the next few weeks. At last year’s annual
meeting CEO Lee Scott enthused he was “excited about organic
food, the fastest growing category in all of food, and at Wal-Mart.” While
he says Wal-Mart’s intention is to make organic food affordable,
I’d take that idea with a grain of salt.
To be sure, Wal-Mart wouldn’t move into the organic sector unless
there’s profit to be had. And with major corporations getting
in on the ground floor, we can expect to see them use their corporate
muscle to manipulate organic standards to suit their purposes, which
will not be to maintain safe food. Nor will the corporate takeover
of organics help out farmers. They will no doubt bear the brunt of
this race to the bottom line.
Whole Foods or Whole-Mart?
If you shop for natural foods, increasingly your option
is Whole Foods—and that’s it. Like with Starbucks and
local coffee shops, once a Whole Foods lands in a neighborhood, independent
natural/health food stores go out of business. Whole Foods CEO John
Mackey has openly expressed his admiration of Starbucks. Last year,
at an animal rights conference, Mackey confidently predicted that
with their current growth rate, 10-15 years from now Whole Foods
will be second to Wal-Mart. Second.
Many vegans and vegetarians welcome the expansion of Whole Foods. It
conveniently provides a variety of products, where there used to be
just a few in a local health food store. But sometimes unchecked growth
is unsustainable and we have to realize when enough is actually a worthy
goal. Is Whole Foods turning into Whole-Mart?
Where Does Your Food Come From?
It’s a simple question, but for most of us, the answer
is rarely easy and often quite disparate.
It wasn’t until a few weeks ago that I really gave all of this
much thought. As we delved into research for this issue, I kept thinking
about the fact that the overwhelming majority of Americans don’t
get their food from local farms—myself included. Generally, we
don’t know the people who grow or sell our food, or where it
comes from. Americans get their food from grocery retailers, anonymously
packaged and ready to go. As I looked into it more and more I started
to realize how our food “choices” are actually dictated
by a small fraction of the retail sector, and that our choices are
Those most invisible and vulnerable in all of this expansion are the
anonymous faces behind our food choices: small farmers. What will become
of them as competing food retailers elbow each other to the top?
A great resource for understanding the growth of agribusiness and
the food retail sector is the Agribusiness Accountability Initiative
© STEALTH TECHNOLOGIES INC.