Walmart (NYSE:WMT) will begin charging vendors fees for stocking their items in new stores and for warehousing. The mandate is the latest move from the big-box retailer in an effort to balance out higher costs from employee wage hikes.
Earlier this week, Walmart announced it would amend its agreement with suppliers in order to better control costs. Letters were mailed out to 10,000 suppliers, according to U.S. CEO Greg Foran. Foran first hinted that terms with suppliers would change back in an April presentation with analysts.
Walmart is trying to cover the costs that will result from raising workers' minimum starting wages to $10 an hour by 2016, which was announced in February.
Similar fees have been imposed in the past, but not to all suppliers, only a select few, Business Insider reported. This time, Walmart was seeking change across the board, with all suppliers.
The new agreements mean a number of suppliers will likely start paying fees, passing the retailer's costs onto vendors. For example, Walmart wants to charge a one-time fee to food suppliers—10 percent of the value of inventory shipped to new stores and warehouses—and a 1 percent charge to hold inventory in existing warehouses.
In an effort to save money and avoid price hikes for consumers, CEO Doug McMillon asked vendors In April to cut their costs as a courtesy to its shoppers.
-See this Business Insider article
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