Will Chinese Consumers Trust Wal-Mart Again?
Coming off the heels of a tumultuous string of years, Wal-Mart (NYSE:WMT) is now ready to invest the equivalent of $16.3 million in its China-based stores to bolster its food-safety management, The Wall Street Journal reported Thursday.
Wal-Mart released a statement that details its three-year plan “to expand food inspection, supply-chain management and supplier training.” The company plans to set up previously tested food-safety labs that will be developed to run third-party food-quality tests at 70 stores across China’s Southern province.
The launch of Wal-Mart’s new plan follows a series of food scandals that has caused the company to come under public fire and face significant outrage. Its most recent accusation, reported in the Xinhau news agency, is the use of expired eggs in its baked goods products sold to customers, an allegation that has not been confirmed.
Wal-Mart has had to heighten its food-safety practices, as trust in the Chinese food-industry is precarious with the most recent issues being the mislabeling of meat products and the attempted selling of a liquid tainted to look like milk. Wal-Mart hopes to accelerate change in China’s food industry and has taken over management in its China-based stores to implement new programs that ensure consumer safety.
With Wal-Mart holding the No. 3 share in China, it is understandable why the company is willing to invest to strengthen its food management and practices. It hopes that increased employee training coupled with the addition of retail compliance experts and fresh-food testing centers will help recover its food safety and regain consumer trust.