NEW YORK — Wal-Mart Stores Inc. plans to significantly ramp up its donations to the nation's food banks to total $2 billion over the next five years, the retail giant said Wednesday.
The company is more than doubling its annual rate of giving as the number of Americans receiving food stamps has risen to one in eight, and food banks are straining to meet demand.
The news came the same day that Wal-Mart disclosed in a federal court filing that it would pay $86 million to settle a class-action lawsuit accusing it of failing to pay vacation, overtime and other wages to thousands of former workers in California. It’s one of many lawsuits the company has faced over its treatment of workers.
Wal-Mart's plan comes in two parts: At least $250 million in grants over five years will go to efforts such as buying refrigerated trucks, which help fruits, vegetables and meat last longer to make it from store to charity, and programs to feed children during the summer when they're not in school and receiving government meals.
But the bulk of the donations will consist of more than 1.1 billion pounds of food that doesn't sell or can't be sold because it's close to expiration dates, for example. About half will be fresh fruit, vegetables, dairy and meat — items that food banks say they're seeing more demand for.
The company estimates the food will provide 1 billion meals. Store employees will even offer assistance to food banks to help run their operations more efficiently.
The move extends Wal-Mart's sharp increases in donations in recent years. In 2009, the company spent $21 million on hunger relief and donated 116.1 million pounds of food, up from $12 million in cash and 42.7 million pounds of food in 2008.
Catch-up with rivals
The donations may also represent Wal-Mart playing a bit of catch-up with other grocers. The nation's second-largest supermarket chain, Kroger Co., donated 50 million pounds of food in 2009.
"As we laid out the case for need over the last couple of years, I think it became clear that this was something that Wal-Mart, as the largest grocer in the country, needed and wanted to do," Wal-Mart Foundation President Margaret McKenna said in an interview.
St. Mary's Food Bank in Phoenix, Ariz., has nearly doubled the amount of food it distributes in two years to keep up with the rising need. First-timers are easy to spot, said St. Mary's Food Bank President Terry Shannon.
"They walk in the door, their eyes are down on the ground. They're embarrassed to be there. They don't know what else to do," said Shannon, who will help make the announcement at a news conference in Washington on Wednesday.
The food bank now picks up about 1,000 pounds of food per week from each of 53 area Walmart and Sam's Club stores.
A ‘huge gift’
Wal-Mart also plans to use its logistics expertise to help food banks operate on a larger scale and run more efficiently. Company experts will help food banks make tweaks such as installing heavier shelving to hold more food or set up their locations more like stores so they are easier to navigate, McKenna said.
Although there are signs of economic recovery as companies make more profits and the stock market rebounds, job creation is still weak. That means needs will remain high, said Vicki Escarra, CEO of Feeding America, the nation's largest hunger relief charity.
"I think people are recognizing as recovery takes place, middle-income jobs are becoming more and more scarce, and so I think this is certainly a crisis in America," she said.
Wal-Mart has been one of the country's biggest corporate givers for at least the past decade, but the $2 billion commitment is a "huge gift," said Steven Lawrence, director of research at the Foundation Center, a national authority on philanthropy. Food assistance typically goes overseas, so this announcement could inspire more foundations and companies to shift priorities.
"I think it's sending a message to the grant-making community and to the world that the economic crisis is not over," he said.
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