Walmart is committing $350 billion to advancing U.S. manufacturing over the next 10 years.
As part of this decade-long commitment, Walmart will be spending an additional $350 billion on items made, grown or assembled in the United States. The Bentonville retailer announced its manufacturing initiative on Wednesday, saying that this investment would support 750,000 new jobs, based on a Boston Consulting Group estimate.
Walmart will be focusing on six categories: textiles, plastics, electrical appliances, food processing, pharmaceutical and medical supplies, and Goods Not For Resale.
“U.S. manufacturing really matters,” Walmart U.S. president and CEO John Furner said. “It matters to our suppliers, to entrepreneurs and to the environment. It matters to our customers – more than 85 percent of which have said it’s important for us to carry products made or assembled in the U.S. And most of all, because of the jobs it brings, it matters to American communities and the people who live in them.”
According to a company release, Walmart pledged in 2013 to invest $250 billion to purchase U.S.-made, grown or assembled products, which it is reportedly on track to accomplish. This announcement represents an expansion of this effort.
In a corporate blog post, Furner cited the “Bring it Home to the USA” initiative, a Walmart campaign from 1985, as the starting point for the new manufacturing investment. “We wanted to bring great new products to our customers that are sourced locally, and we wanted to support more jobs in the U.S.,” he wrote.
Based on figures from the National Association of Manufacturers (NAM), the United States’ manufacturing output in 2018 was $2.334 trillion. Manufacturing output has sharply risen from the depths of 2009, when the United States reported $1.7 trillion in manufacturing output.
Since that time, output rose each consecutive year through 2015. From 2015 to 2016, the output dropped slightly but increased in 2017 and 2018.
Through its investment initiative, Walmart is aiming to reduce manufacturing’s environmental impact and increase its impact on U.S. small businesses. Using a Boston Consulting Group analysis, Walmart has concluded that the investment will result in a reduction of 100 million metric tons of CO2 emissions due to closer product sourcing. Furner also said that this would provide small businesses and suppliers to have the opportunity to become Walmart partners through the annual Open Call events.
Furner also announced a new initiative called the “American Lighthouses,” which aims to overcome barriers in U.S. manufacturing and production by bringing together members of the supplier community, academics, government officials and economic development groups. “By bringing together key regions and various stakeholders, we can make the supply chain more efficient. The aim is to bring U.S. manufacturing back in a sustainable, long-term way,” Furner wrote.
Walmart reported record revenue numbers in its most recent fourth quarter filings, with $152.1 billion in revenue. This marked an increase of $10.4 billion, or 7.3 percent, compared to the previous year’s fourth quarter. For Fiscal Year 2021, the company reported $559.2 billion in revenue, an increase of $35.2 billion, with U.S. comp sales increasing by 8.6 percent and U.S. e-commerce sales increasing by 79 percent.