Wal-Mart Willing To Raise Prices

Feb 09, 2004
George Anderson

By George Anderson

A report on the Business Week Web site says Wal-Mart is being more flexible when it comes to suppliers raising prices on the cost of goods.

This newfound willingness to let suppliers pass along additional manufacturing costs is not a response to the negative press Wal-Mart has received for squeezing suppliers and
sourcing product overseas, especially in China, but more an understanding on the retailer’s part that it needs higher prices on goods to drive same-store sales comparisons.

Wal-Mart, in effect, has become a victim of its own deflationary pricing practices.

Jay Fitzsimmons, senior vice president for finance for the retailer, sees overall prices paid by Wal-Mart shoppers continuing to go down but at a slower rate than in the past.

Moderator’s Comment: Have you seen evidence, or heard of Wal-Mart easing pressure on
suppliers as stated in Business Week? Has Wal-Mart’s deflationary pricing practices begun to hurt it, as well as its competitors?

A separate piece in Saturday’s Washington Post discussed how the pressure Wal-Mart puts on Chinese suppliers to keep costs down has affected factory
workers, the labor movement and the economy in that country.
Anderson – Moderator

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