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Walmart says price cuts helped shoppers save billions on produce

Two people walk outside a Wal-Mart store in Mexico City January 11, 2013. REUTERS/Edgard Garrido
Two people walk outside a Wal-Mart store in Mexico City January 11, 2013. REUTERS/Edgard Garrido

By Jessica Wohl

(Reuters) - Walmart shoppers have saved $2.3 billion by buying produce at its stores in the first two years of its push to sell more healthful fare and more of it, the largest U.S. grocer said on Thursday.

Walmart U.S., the largest division of Wal-Mart Stores Inc , also said it has exceeded its goal of reducing the amount of sugar in some products.

Walmart said in January 2011 that it wanted to improve the nutritional value of the food it sells, make healthier fare less expensive and make it easier for Americans to access such goods.

Walmart's customers are struggling to put healthful food on the table, especially with higher gasoline prices and payroll taxes.

"They've repeatedly told us that while they want to feed their families healthier food, they don't always know how to do that and they worry that it is simply too expensive," said Leslie Dach, Walmart's executive vice president of corporate affairs.

Grocers, restaurants and food makers are under pressure from consumers and public health officials to sell more healthful food in an effort to address the nation's obesity crisis. More than two-thirds of U.S. adults and nearly one-third of youth aged 2 to 19 are overweight or obese.

Food is a huge business for the world's largest retailer, which has been lowering prices, along with its healthier makeover, to boost sales. Groceries, including goods such as paper towels, account for roughly 55 percent of Walmart's sales.

Walmart said its shoppers saved $1.2 billion on fresh fruits and vegetables in 2012 and $1.1 billion in 2011, based on third-party verified pricing comparisons between its stores and those of unidentified rivals. Efforts such as buying more local produce and cutting supply chain costs have helped it keep a lid on prices.

In 2011, Walmart and other chains publicly committed to opening stores in designated rural and urban "food deserts" where access to groceries is limited. In Walmart's case, some of those urban areas include markets where it has faced resistance to its large stores.

Walmart has opened 86 such food stores since 2011 and aims to open a total of 275 to 300 by the end of 2016.

First Lady Michelle Obama traveled to one of Walmart's "food desert" stores in Springfield, Missouri, to tout the company's progress in selling healthy products.

"You've opened these stores, including this one, in underserved communities," said Obama, who published an opinion piece in The Wall Street Journal on Thursday focusing on the need for companies to help make changes so Americans can find and eat healthier foods.

"You're building closer relationships to your customers and stronger communities. ... The changes you've made are good for Walmart's top line and bottom line going forward."

SODIUM IN BREAD, SUGAR IN SALSA

Walmart said it has exceeded its goal of cutting sugars by 10 percent in categories such as dairy, sauces and fruit drinks. It has reduced the level of sodium by 9 percent in categories such as luncheon meats, dressings and frozen meals, and aims for a 25 percent reduction by the end of 2015.

Sodium and sugar are often hidden in some packaged foods.

"Bread is the No. 1 source of sodium in the American diet," said Andrea Thomas, Walmart's senior vice president of sustainability.

Walmart's push has cut the sodium in products sold in the bread aisle by 13 percent, the equivalent of removing 1.5 million pounds of salt from its shoppers' diets, Thomas said.

Several products are starting to carry a "Great For You" icon, aimed to designate more healthful foods and drinks. Walmart announced the icon a year ago, and national brands will soon be able to add it to their packaging as well.

Fresh fruits and vegetables qualify for the icon, as do lean cuts of meat, whole grain cereal and pasta, and low-fat milk.

Some products are changing to meet the criteria. Walmart's Great Value salsa had too much sugar to qualify, but a reformulated version can carry the icon, Thomas said.

(Reporting by Jessica Wohl in Chicago; additional reporting by Deborah Charles in Springfield, Missouri; Editing by Dan Grebler and Leslie Adler)

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