Wal-Mart said the plan to source more from the US, committing around $5bn a year to the scheme, is an effort to create US jobs and spur economic growth. The moves come as the US economy continues to grow slowly, however the proposed commitment from Wal-Mart is a drop in the bucket for the $15tn US economy.
Wal-Mart’s US unit says about two-thirds of the goods it buys for its stores are made, sourced from or grown in the US, citing data from its suppliers. It did not give a dollar amount for how much it pays for those goods, or what percentage the increased domestic sourcing would bring.
According to a report in Reuters, last year, 55% of Wal-Mart US sales came from groceries like food and drinks as well as other products that are typically sourced locally. Only 7% of Walmart US sales were of apparel, jewellery and accessories – the kinds of products the scheme would target, which retailers typically get from lower-cost countries.
The moves received a cool reception from critics who claimed Wal-Mart does not pay its workers enough and slammed the retailer for selling too many goods made in lower-cost countries. The company is also under pressure over its sourcing practices, particularly after a deadly fire at a Bangladesh factory that made Wal-Mart clothes.
Terry Lundgren, chief executive of department store Macy’s and until this month the chairman of the National Retail Federation, told Reuters that Wal-Mart’s plans to buy American were good but that cost would still be an issue.
“We would all love to do that, the customer will not pay more,” Lundgren told Reuters on the sidelines of an NRF event where Wal-Mart presented its plans.
