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Business Week reports that Wal-Mart, which said last year that it would double its commitment to organic and natural products and make them more “accessible” – meaning “cheaper” – to consumers, is backing off those plans. The shift has been noted by organic farmers across the country, who say that “the retailer is cutting back or stopping orders altogether.”

The company now is denying that it even has a public target for how many such products it will carry, and says that its original statements were misnterpreted by the media. “Karen Burk, a spokeswoman for the company, says that the majority of Wal-Mart stores are offering between 100 and 200 organic food items,” Business Week writes. “She says the company does not have a target, at least not a public one, of stocking 400 organic items in the average store.” Wal-Mart’s current plan seems to be store-specific with its organic offerings, rather than taking a chain-wide approach.
KC's View:
Seeing as how Wal-Mart has been backing off its plans to move upscale in a number of categories, this shouldn’t come as much of a surprise.

Wal-Mart has been caught in the middle of a marketing conundrum. On the one hand, it appears that the Bentonville Behemoth has sold about as much typical Wal-Mart merchandise to typical Wal-Mart customers as it could, which necessitated a move into new (urban) markets and the targeting of new consumers. On the other, as Business Week notes, there was “a disconnect between Wal-Mart's brand and the products it hopes to sell.” And the conundrum has left Wal-Mart shoppers a bit confused…which may explain why the company said this week that it would be tough to meet first quarter profit expectations.

This news story could get traditional organic/natural retailers and producers to relax a bit. Ever since Wal-Mart announced its plans in this area (we’d argue with Wal-Mart’s current characterization that its intentions were inflated by the media), people in the organic biz have been concerned that the result would be declining standards and reduced supply. The supply issue certainly is a real one; lack of supply is one of the reasons that Wal-Mart is backing off, according to the BW story.