Wal-Mart Prices Below Wholesale

By George Anderson

Despite allegations to the contrary, Wal-Mart isn’t looking to put mom and pop stores out of business.

As it turns out, mom and pop stores are becoming an increasingly important customer base for the chain. Small operators can be found on a daily basis shopping in supercenters and discount stores for prices lower than they can get from their own wholesaler.

David Litwak describes the practice in April’s Grocery Headquarters. “No wholesale agreements, no off-invoice allowances – just wheeling a Wal-Mart cart down the aisles picking out whatever they need and then pushing it up front to the registers, where a quick cash exchange often takes place.”

Noel C. Paul’s article, The 40-aisle boutique, from the March 3, 2003 edition of The Christian Science Monitor included an account of an independent convenience store owner from south-central Maine. The small retailer’s stores purchases became so large, he began making pickups directly from Wal-Mart’s warehouse.

Moderator’s Comment: How is it that independents are
able to buy products from Wal-Mart retail stores at a lower price than they
can purchase them from their wholesaler? [George
Anderson – Moderator]