Brian Sozzi Discusses Wal-Mart's New Food Initiative (WMT)

Brian Sozzi of Wall Street Strategies is out with a research report on Wal-Mart, after the company announced it would be changing the way it stocks its shelves with food supplies, as well as impacting the diets of so many Americans. In the report, Sozzi writes, "While many food retailers are now starting to tackle the issue with price increases on the final products consumers purchase and additional store closures, Wal-Mart is attacking the problem by employing a structural technique. Basically, it centers on using scale to press suppliers to remove excess commodities from products like turkey and coup. The rationale here is to lower the cost base of Campbell Soup CPB or a Coca Cola KO and in turn, driver harder bargains on product costs." Sozzi goes on to say, "The initiative announced today to extract excess sodium and sugar (among other aspects to the plan) is similar to one brought to the surface a few years back, but unlike then, it has star power in the form of an endorsement from First Lady Michelle Obama. From a humanitarian perspective, Wal-Mart is bringing welcome news to many a population struggling with alarming obesity rates, malnourishment, or both." Shares of WMT are up 79 cents to $55.82, a gain of 1.4%.