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Many economists argue that globalization will not shift into reverse even if oil prices continue their rising trend. But many see evidence that companies looking to keep prices low will have to move some production closer to consumers. Globe-spanning supply chains — Brazilian iron ore turned into Chinese steel used to make washing machines shipped to Long Beach, Calif., and then trucked to appliance stores in Chicago — make less sense today than they did a few years ago. To avoid having to ship all its products from abroad, the Swedish furniture manufacturer Ikea opened its first factory in the United States in May. Some electronics companies that left Mexico in recent years for the lower wages in China are now returning to Mexico, because they can lower costs by trucking their output overland to American consumers.

Decisions like those suggest that what some economists call a neighborhood effect — putting factories closer to components suppliers and to consumers, to reduce transportation costs — could grow in importance if oil remains expensive. A barrel sold for $125 on Friday, compared with lows of $10 a decade ago. “If prices stay at these levels, that could lead to some significant rearrangement of production, among sectors and countries,” said C. Fred Bergsten, author of “The United States and the World Economy” and director of the Peter G. Peterson Institute for International Economics, in Washington. “You could have a very significant shock to traditional consumption patterns and also some important growth effects.” More

Major retailers say sales of house brand items are climbing as shoppers look to save a few pennies in a downbeat economy. Wal-Mart, Safeway and Kroger say their store brands have traditionally sold well and sales have recently increased. The Food Marketing Institute, a trade group in Arlington, Virginia, says about 60% of shoppers say they now buy some store brands. Kroger offers “Private Selection.” Safeway offers “O Organics.” Wal-Mart rolled out “All Natural”. Do Brand X disposable diapers beat Pampers? Probably not, but an increasing number of shoppers appear willing to experiment with the cheaper product. More

Locally grown produce is in vogue as even the biggest grocers try to appeal to shoppers and save on fuel costs. Among the big names selling homegrown food are Whole Foods Market, Safeway, Tesco, and Wal-Mart. As gas prices remain high and the popularity of local food grows—the number of local farmers markets has more than doubled in the past decade, the Department of Agriculture says—grocers are reviving the old practice of buying from smaller regional farms. More

(Reuters) - A Minnesota judge has ruled that Wal-Mart Stores Inc violated state wage and hour laws, requiring employees to work off the clock, and the discount retailer could now face more than $2 billion in possible fines. Minnesota District Court Judge Robert R. King Jr ruled that Wal-Mart owes $6.5 million to thousands of current and former employees because of wage the violations, which included a failure to give workers their full rest breaks and requiring hourly employees to work off-the-clock during training. Wal-Mart could now face a fine of up to $1,000 for each violation of the Minnesota wage and hour rules. With more than 2 million violations cited by the judge, that means the discount retailer could face more than $2 billion in fines. More

Paul Carton
Since February, our ChangeWave consumer spending trends surveys have shown tremendous strength for Wal-Mart and Costco - and the current findings are no exception. Our latest survey of 4,403 respondents continues to track a powerful consumer movement towards the discount retailers and wholesale clubs — even though overall consumer spending is rising for the first time in nearly a year. The May 6-14 ChangeWave survey focused on spending patterns for the next 90 days - and Costco and Wal-Mart once again led all other retail outlets in terms of future spending growth. More

Photo Jaye
Wal-Mart Stores said Monday it will offer 90-day prescriptions of some generics for $10, add several women’s medications at a discount and lower the prices of more than 1,000 over-the-counter medications to $4 or less. The move marks the third phase of $4 prescription program, which began in 2006 and has saved customers more than $1 billion, Wal-Mart said. With the expansion, the company began filling prescriptions Monday for up to 350 generic medications at $10 for a 90-day supply at Wal-Mart, Neighborhood Market and Sam’s Club pharmacies in the U.S.
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