Wal-Mart Stores Inc. (NYSE: WMT), after having been connected to multiple safety recalls in 2008, has finally said it will require higher standards from its suppliers. Not just any suppliers, but those specifically manufacturing in China. It's no surprise -- China has been the source of almost all of these recalls, from baby food to toys to play guitars.Wal-Mart indicated yesterday that it will be setting new quality standards for its Chinese suppliers. What has transpired in China recently is completely pathetic; it its quest to grow its already-hot economy, the country appears to have little quality oversight in many, many areas. But when Wal-Mart says that it wants better quality, things could change. China is - by far - Wal-Mart's largest overall supplier.
But then again, lip service could be at play here by the world's largest retailer. If it really wants to change things, make quality standards public and transparent to the WMT shareholder and your customers. Then, and only then, will Wal-Mart's new "quality standards" requirement have any real worth. Until then, the proof won't be worth any pudding.
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Chasing Value: Ten stocks for 2010 -- Part 2
