By Sarah Nassauer 

Wal-Mart Stores Inc. is asking its meat and egg suppliers to curb their use of antibiotics and offer animals more humane living conditions, inching into a tricky supply issue as Americans press for higher standards for what they eat.

The world's largest retailer is asking farmers who grow beef, chicken, pork and other animals for its U.S. stores to limit their use of antibiotics to sick animals and to never use antibiotics to promote animal growth.

In addition, the company is asking suppliers to raise animals with sufficient space for them to express "normal behaviors" and "freedom from discomfort," among other animal welfare measures. Kevin Gardner, a Wal-Mart spokesman, said that includes asking suppliers to find solutions to animal welfare concerns around battery cages, gestation crates and veal crates, small confined areas used to raise many chickens, pigs and cows in the U.S. today.

The new guidelines come months after McDonald's said it would curtail use of antibiotics in its U.S. chicken and Tyson Foods Inc., the largest U.S. meatpacker by sales, said it would phase out use of human antibiotics in its U.S. chicken. Wal-Mart's new guidelines aren't mandatory but will send ripples through the industry regardless, as the company is the country's largest grocer, with grocery accounting for 56% of the $288 billion in Wal-Mart U.S.'s sales last year.

The guidelines will affect suppliers to U.S. Walmart and Sam's Club stores. The company hopes to "work collaboratively with suppliers on this topic," Mr. Gardner said.

Wal-Mart executives are working to improve the quality of fresh meat and produce in an effort to strengthen operations in the U.S., which accounts for about 60% of the company's sales. Same-store sales at Walmart U.S. rose 1.1% in the most recent quarter.

Concerns about the way animals are raised has become a powerful issue among shoppers, who are increasingly willing to pay a premium for foods they perceive as healthier, more humane or better for the environment.

Overall egg sales are flat, but sales of more expensive eggs that tout 'cage-free,' 'pasture raised' or similar attributes are booming. Organic milk, sold at a premium to regular milk, has become a staple for a wide swath of the American public--in large part because parents want to avoid giving their children food raised with the use of growth hormones and antibiotics, according to research from the Organic Trade Association, which represents the industry.

A survey done by Wal-Mart ahead of the change in policy found that about 66% of shoppers would gravitate toward a retailer that said it would ensure humane treatment of livestock.

For food producers, navigating shifting shopper habits and retailer preferences on these issues has been complex. Some egg farmers say they are grappling with what type of hen housing to invest in to fit consumer, retailer and government preferences.

Many consumers say they would prefer eggs from hens not raised in battery cages, often smaller than a sheet of office paper, the most common housing method in the U.S. But raising hens in larger cages or letting them roam free in an enclosed building--what's known as "cage free"--is pricey. Some farmers worry demand will shift back to the lowest priced options.

Animal rights organizations cheered Wal-Mart's announcement. "Walmart's animal welfare announcement is game-changing progress" from a retailer with the power to influence every step of the supply chain, said Wayne Pacelle, chief executive of the Humane Society of the United States. The organization said it hopes to see a timeline put in place.

Widespread antibiotic use in animal production has raised alarm bells as antibiotic-resistant infections in humans rise. In 2013, the FDA recommended that antibiotics only be used in food-producing animals to address their health needs, not to promote growth.

Wal-Mart has discussed antibiotic and animal welfare guideline changes with suppliers for about a year, said Mr. Gardner, the company spokesman. The company is also asking suppliers to publicly share annual progress reports, their own animal welfare positions and current animal antibiotic use.

"A lot of our suppliers have already made a lot of progress," Mr. Gardner said.

David Kesmodel contributed to this article.

Write to Sarah Nassauer at sarah.nassauer@wsj.com

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