Walmart suppliers to face fees
June 24, 2015
by MEAT+POULTRY Staff
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BENTONVILLE, Ark. – Wal-Mart Stores Inc. changed its supplier agreements to include fees and other changes as the company grapples with rising costs, Reuters reported
. Walmart plans to charge fees for stocking new stores and warehousing products.
The company has charged suppliers fees in the past, but not uniformly, according to Reuters. The new agreements mean more of the retailer’s vendors will be paying fees to cover the company’s rising operating costs while keeping prices low for consumers. Executives with the company indicated changes were coming. During the company’s annual management update for the investor community, Doug McMillon, president and CEO said the company will not play games with price.
“The power of Walmart and the power of EDLP (everyday low price) was that people stopped making a choice about where they were going to shop because we had earned their trust, not convinced them that we could be trusted but actually earned it. And we did it with price and we did it with the in-stock and we did it with associates and service.
“So the deep concern I have about playing games with price for an individual is that you are teaching them not to trust you. That’s the opposite of what we want to do.”
And, in April Greg Foran, president and CEO of Wal-Mart US, outlined ways to improve Walmart’s business during a conference call with investors and analysts. At the time, Foran said the company’s inventory quantity and flow needed improvements.
“We’ve got too much inventory in the back rooms, and our processes are not where we want them to be,” Foran said. “And that is causing some undue shrinkage and some out-of-stocks. We’ve had too many… displays, not allowing associates to merchandise their store the way they need to for their customer.”