Wal-Mart Stores Inc.
) announced that it is recalling its donkey meat products in
China after DNA testing showed traces of fox meat in the
As per media reports, Walmart recalled all products from its
local vendor DezhouFujude Food Company Ltd., after fox DNA was
identified in samples. The company has not only decided to
compensate the affected consumers, but is also increasing DNA
testing in China, going beyond what is legally required in
Last year, Walmart announced its plans to invest 100 million
yuan ($16.5 million) over three years to upgrade its food safety
measures in China. The company also planned to start a mobile
food-inspection program and increase supplier training. However,
the company has not been able to maintain the set standards,
which is denting its reputation. According to Bloomberg, the
company had encountered similar issues in China earlier too such
as mislabeling pork in 2011.
Not only Walmart, Kentucky-based famous restaurateur
Yum! Brands Inc.
) also faced questions about the quality of chicken supplied to
its KFC units in China. Though Yum Brands' KFC division is
working to repair its reputation, sales in China continue to
Walmart officials are co-operating with Chinese authorities in
their investigation and are leaving no stone unturned to maintain
the company's reputation in the world's most populous nation.
China is a strategic market for Wal-Mart as the global chain
is facing a difficult retail environment in the U.S. following
the recent slowdown of the economy. Moreover, amid several legal
issues, the grocery giant had to part ways with its Indian joint
venture partner, Bharti Enterprises in Oct 2013. Walmart is thus
geared to expand its Sam's Club stores in China. Walmart
currently has 404 stores in China and has plans to add as many as
110 stores over the next three years in China. Walmart currently
holds a Zacks Rank #3 (Hold).
Other better ranked retailers include
Harris Teeter Supermarkets Inc
The TJX Companies Inc.
), both of them carrying a Zacks Rank #2 (Buy).
HARRIS TEETER (HTSI): Free Stock Analysis
TJX COS INC NEW (TJX): Free Stock Analysis
WAL-MART STORES (WMT): Free Stock Analysis
YUM! BRANDS INC (YUM): Free Stock Analysis
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