Boston, MA 06/19/2014 (wallstreetpr) – The American retail giant, Wal-Mart Stores, Inc. (NYSE:WMT) intends to pour more money in food safety measures in China. Last year the company had announced an investment of 100 million Yuan for food safety measures over three years through 2015. For the same period now, Walmart is increasing its investment to 300 million Yuan. The company has also said that it will be increasing DNA testing on meat and regular supplier inspection will be conducted. More stores of Walmart will be tested with company’s two mobile safety labs.
Quality issues for retailers in China
Food safety is the top concern of consumers and unfortunately Wal-Mart Stores, Inc. (NYSE:WMT) has failed to meet the set standard which is ultimately costing the company its reputation. According to a media report, earlier this year, Walmart had to recall products from a particular local vendor after fox DNA were found in samples. According to Bloomberg, Walmart had faced similar issue in 2011 after mislabeling pork in China.
In China, its not only Walmart facing quality issues, but the famous Kentucky based restaurateur Yum! Brands, Inc. (NYSE:YUM). had also faced questions on its quality of chicken. Yum Brands’ KFC division is doing everything to repair its dented reputation but still the sales in China are rolling down.
Growth opportunities for Walmart in China
China being a strategic market is of immense importance for the Walmart. When Wal-Mart Stores, Inc. (NYSE:WMT) is facing declining comp sales everywhere because of the slowdown of the economy, losing reputation in China will hurt the company deeper. Walmart sees immense opportunities in China as it expects the food and grocery market of China to be hitting $1.5 trillion by 2016. The company is pouring money to enhance its reputation and thus expand in China. Currently, Walmart has got 404 stores all across China and Company plans to open another 110 stores by 2016. Walmart is all geared up to grow and expand in China.
