Manufacture This

The blog of the Alliance for American Manufacturing

CNN Money reporter Parija Kavilanz has delved into an interesting subject-- whether or not Wal-Mart is sourcing more of its goods from the U.S. or overseas.

For years, Wal-Mart has been seen as the low-cost retail floor, featuring "Low prices. Every day. On everything."  To offer the absolute rock-bottom of retail prices, however, it has sourced most of its inventory from overseas, especially China.  Unfortunately, this has sometimes led to Wal-Mart stocking toxic toys and other tainted goods from China.

Recent polls, though, show that Americans are eager to buy Made-in-USA goods when possible.  In addition to the safety and quality offered by domestically manufactured products, consumers understand that buying American-made goods helps to support the nation's manufacturing base and the good jobs it provides.

Wal-Mart is undoubtedly aware of the resurgent interest in buying American-made.  Recently, Wal-Mart CEO Mike Duke claimed that a majority of the company's offerings are now made in the U.S.

As Kavilanz reports for CNN Money, the claim is based more on consumer sales choices instead of overall inventory:

Wal-Mart's U.S. push is more likely a matter of the mix of the products it's selling and how Americans are shopping, industry observers say, than a sign that it's returning to its patriotic roots.

Lately, Wal-Mart shoppers are focused on buying basics like groceries, which often come from the U.S. They're not really spending on other goods, like foreign-made electronics and clothes the discounter used to be known for.

Wal-Mart reports that 54% of its total sales are currently derived from groceries and household goods, such as detergent and paper towels, that are made in USA. 

However, higher-value items, like electronics, appliances, and clothes are still mostly imported.

Kavilanz quotes Alliance for American Manufacturing (AAM) Executive Director Scott Paul, who explains that, actually, Wal-Mart hasn't made a particular shift back to domestic suppliers:

"I'm not going to dispute that Wal-Mart's product mix has changed to favor more groceries and household goods," said Paul, adding that most of those products are sourced in America.

"Wal-Mart was the trendsetter in persuading American manufacturers to outsource," he said. "It would be nice to see them lead the reshoring fad. But there's scant evidence of it yet."

Still, Paul notes a very nascent trend of some American companies pulling sourcing out of China due to rising production, labor and shipping costs.

"That's begun to happen in the auto industry. I think it will trickle into consumer products, too," he said.

But the challenge there is that the United States doesn't have enough manufacturing capacity to shore up domestic production of other consumer goods like clothing, shoes, toys and electronics overnight, said Paul.

Ideally, the reshoring trend will continue to take hold, as higher fuel prices and product quality concerns deter transoceanic imports.

In the meantime, ManufactureThis will be conducting a product inquiry at various Wal-Mart stores to determine whether the retailer is in fact shifting toward more domestic offerings.  Stay tuned for updates.

Click here to read the full CNN Money article.