Hedgeye Retail Sector Head Brian McGough tosses some cold water on Wal-Mart's "Made In USA" initiative.
From Women's Wear Daily:
- "Bill Simon, Wal-Mart’s U.S. president and chief executive officer, revealed at an investment summit here Thursday that three of its suppliers have committed to moving production back to the U.S., or expanding existing capacity, as part of the retail giant’s longer-term commitment to buy $50 billion worth of American-made products over the next 10 years."
Takeaway: We are all about boosting U.S. production. But let's put this news into context. $50 billion over 10-years is likely $1 billion in year one, and $10 billion in year ten. But even if we want to be generous, and call it $5 billion per year, it's still only 1% of the half a trillion worth of product Wal-Mart will sell next year. Bottom line is that this is hardly Wal-Mart going all-out. It's a PR campaign more than anything else.