NEW YORK (MainStreet) – Last week, two of the nation’s biggest corporations made efforts to clean up their acts.
First came Wal-Mart (Stock Quote: WMT), which announced Monday that it plans to begin offering healthier food in its stores. The five-year plan includes reducing fat and sodium in packaged food and increasing the availability of low-priced fresh fruit and vegetables.
Meanwhile, Marriott (Stock Quote: MAR) confirmed rumors Friday that it would stop offering adult Pay-Per-View programming as an entertainment option in its new hotels. While adult programs will still be an option in existing hotels, new Marriott hotels will use a new video-on-demand entertainment system that does not include adult programs or movies.
Undoubtedly, these are both good PR moves – Wal-Mart gets to tout its role in the fight against obesity, while Marriott gets to hone a more family-friendly image—but these moves also raise a question: Are these companies trying to be better corporate citizens, or are they chasing profits?
“There is a profit motive here,” said Brian Sozzi, an analyst for the stock market research firm Wall Street Strategies who covers the retail industry. Sozzi argues that pushing suppliers to reduce amounts of certain ingredients in their products – for instance, asking Campbell’s to reduce sodium in its soup – will allow retailers like Wal-Mart to demand lower wholesale prices for the product in question. He also notes that procuring fruits and vegetables from local growers will minimize transportation costs even as it wins the company plaudits from environmentalists. “They might be trying to cut costs more, and if they can make some good headlines, all the better,” Sozzi says.