Monday, February 13, 2012

Walmart's New Health Food Push: Is It Too Hard to Swallow?

Walmart (WMT) has its work cut out for it. The world's largest retailer is trying to prove that it can be a source for healthy eating on a shoestring budget with its recently introduced "Great for You" initiative.

Remember, this is the same company that earned an unpleasant reputation thanks to allegations that it runs mom-and-pop shops out of business. It's the same company that regularly comes under fire for long-standing claims that it treats workers unfairly. And another thing: Walmart's latest do-good initiative may not even be popular with its core customers.

The Cheap Chow Stigma

Whether Walmart likes it or not, for years, its discount, price-cutting branding has been associated with cheap bags of Cheetos, low-priced Little Debbies, and elastic-waist pants more than healthy nutritional choices.  

It's a reputation issue that all discount companies face.

One of the biggest debates about America's food supply and diet is the fact that the cheapest food options are often the unhealthiest and most fattening. Rising obesity rates, including childhood obesity, are often linked to low-priced, high-calorie fare.

Just ask McDonald's (MCD) about the public relations problems involved in being linked to cheap food. Health advocates have repeatedly targeted Mickey D's, even going so far as to attack the Happy Meal for enticing children with toys while plying them with fattening food. San Francisco banned fast-food companies from including free promotional toys in kids' meals that didn't meet certain health criteria.

Given the anti-obesity environment, it's no surprise Walmart has embarked on this healthy-eating labeling initiative. Getting marked as part of a major national problem isn't a brand stigma that's easy to shake off, especially with a vocal American public that's growing increasingly health-conscious.

Healthy CompetitionThrough its new initiative, Walmart's healthier house-brand items will be marked with a green "Great for You" alert, meant to educate customers about healthier options to put in their shopping carts. (Later, Walmart will open up the labeling to other brands on its shelves.)

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