Replies

This article doesn't reveal anything new. Sam Walton talked extensively about his battles with suppliers in his autobiography. He refused to pay for the cooperative advertising programs, the cardboard placards, etc. He also refused to allow suppliers to dictate where and how their merchandise would be displayed. He refused to sign contracts that guaranteed a floor price for a product (a minimum product price that he wouldn't go below to keep the product price artificially high). He never made any secret about this. He refused to hire "stars" to advertise his store (remember how well Penny Marshall and Rosie O'Donnell did for Kmart) and broke a lot of other "rules" about retailing and merchandising.

Walmart's tough to do business with. Too bad, so sad. Don't do business with them. If you're losing your *ss selling product to them, quit selling the product to them. If they actually are forcing you to sell below what you can sell the product for, don't sell the product to them.

"Walmart's tough to do business with. Too bad, so sad. Don't do business with them. If you're losing your *ss selling product to them, quit selling the product to them. If they actually are forcing you to sell below what you can sell the product for, don't sell the product to them."

I think you missed the point of the article.

Walmart's tough to do business with. Too bad, so sad. Don't do business with them.

Some of Kraft's execs are threatening to do just that.

I wonder what would happen to walmart's grocery sales if the worlds largest food company refuses to play ball with the worlds largest retailer?

Wal-Mart wields its power for just one purpose: to bring the lowest possible prices to its customers. At Wal-Mart, that goal is never reached. The retailer has a clear policy for suppliers: On basic products that don't change, the price Wal-Mart will pay, and will charge shoppers, must drop year after year. But what almost no one outside the world of Wal-Mart and its 21,000 suppliers knows is the high cost of those low prices. Wal-Mart has the power to squeeze profit-killing concessions from vendors. To survive in the face of its pricing demands, makers of everything from bras to bicycles to blue jeans have had to lay off employees and close U.S. plants in favor of outsourcing products from overseas.

Of course, U.S. companies have been moving jobs offshore for decades, long before Wal-Mart was a retailing power. But there is no question that the chain is helping accelerate the loss of American jobs to low-wage countries such as China. Wal-Mart, which in the late 1980s and early 1990s trumpeted its claim to "Buy American," has doubled its imports from China in the past five years alone, buying some $12 billion in merchandise in 2002. That's nearly 10% of all Chinese exports to the United States.