Walmart pressures suppliers to reduce prices

Walmart (NYSE:WMT) is putting pressure on suppliers to cut the cost of their products in an effort to retain its reputation as the low-price leader and reverse a trend in sluggish sales in the United States, reported The Wall Street Journal.

Walmart has asked suppliers to drop investments in co-marketing with the brand and use those savings to bring down prices.

The retail giant has reportedly asked that suppliers reduce advertising in costly print publications with declining readership, including Sunday circulars, and apply those funds to lowering the cost of goods to the retailer.

The company has a history of pressuring suppliers to cut prices, but the new leadership, under CEO Doug McMillon and U.S. head Greg Foran, is pushing harder than ever. The retailer formerly had a price advantage against competitors, but that same marketshare is increasingly being taken over by warehouses and discount dollar stores.

However, suppliers may not be eager to comply with Walmart's admonitions. Cutting marketing costs means less control over the ways in which in-store displays are promoted, thus potentially obscuring them from shoppers.

The company, which has been looking to cut costs, recently made a heavy investment when it promised to raise employee minimum wages.

For more:
-See this Wall Street Journal article

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