Advertising Age is reporting this week that Wal-Mart Stores is refusing in certain cases to accept price increases levied by consumer packaged goods companies.
For example, retail consultant Burt Flickinger III tells the paper that Wal-Mart hasn't marked up prices on ready-to-eat cereal, despite the fact that the manufacturers in that category raised prices 2-3 percent last February. Kraft has labeled this conclusion "erroneous," while General Mills and Kellogg Co. aren’t commenting.
Wal-Mart just says that "everyday low prices continue to be our goal" when working with vendors, and won’t address the specifics of the report.
The Ad Age story notes that manufacturers are being squeezed by the Wal-Mart moves, as well as by increasing consumer support for private label alternatives in a stagnant economy.
For example, retail consultant Burt Flickinger III tells the paper that Wal-Mart hasn't marked up prices on ready-to-eat cereal, despite the fact that the manufacturers in that category raised prices 2-3 percent last February. Kraft has labeled this conclusion "erroneous," while General Mills and Kellogg Co. aren’t commenting.
Wal-Mart just says that "everyday low prices continue to be our goal" when working with vendors, and won’t address the specifics of the report.
The Ad Age story notes that manufacturers are being squeezed by the Wal-Mart moves, as well as by increasing consumer support for private label alternatives in a stagnant economy.
- KC's View:
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Guess when you get to be the size of Wal-Mart, you really can "name your own price."
If there is any truth to this story, you have to believe it is the kind of information that Wal-Mart wouldn't want out there, especially where government regulators can see it.
After all, if you’re willing to use your size to name your own price for the products you buy, you're also perfectly capable of using your size to charge whatever price you want…and while that often will mean low prices, that isn't always the inevitable result.
