Walmart Pushes Back As Major Product Suppliers Ask For Higher Prices

By: Trademagazin editor Date: 2023. 02. 16. 09:53

Walmart is warning major packaged goods makers that it can no longer stomach their price hikes, pitching its own private-label products to shoppers as less-expensive alternatives to suppliers’ name-brand goods.

For the world’s biggest retailer, which reports earnings Feb. 21, any increase in prices — even by just a few cents — can have negative effects, prompting some shoppers to look for bargains at dollar stores or warehouse chains such Costco.

Walmart, which touts its ‘Everyday Low Price’ policy, raised prices last year on milk, frozen meals and Tide detergent, to name a few, as its suppliers battled soaring costs of everything from chemicals to wheat and fuel.

But now with the cost of cardboard cases declining by 40% to 50%, the cost of transportation falling by 25% to 30% and the cost of raw materials declining significantly, “retailers like Walmart will say ‘hey you already had three rounds of price hikes last year, why are you giving us another?'” said Burt Flickinger, managing director at retail consulting firm Strategic Resource Group.

Rod Little, CEO of Schick razor maker Edgewell Personal Care, told Reuters that it “will be very difficult” to pass new price increases through to retailers going forward. Walmart is Edgewell’s biggest customer.

Little said in an interview: “Because the consumer is now under more pressure, and Walmart is under pressure, that sets up a dynamic where there’s probably not a lot of pricing going forward.”

ESM