Wal-Mart (WMT) Pressures Suppliers to Cut Costs as Competition Looms

Wal-mart (NYSE: WMT) is looking to regain price superiority by pressuring suppliers to cut costs.

According to the WSJ, Wal-mart is telling suppliers to stem joint marketing efforts with the retailer and use the savings to lower prices. Suppliers of branded consumer products typically allocate a portion of their budget to creating things like in-store display and online advertisements.

The initiative could rub suppliers the wrong way; while Wal-mart will be able to draw in more price-conscious shoppers, that may come with the cost of suppliers losing control over how products are displayed and promoted.

Wal-mart is looking to fend off increasing competition from dollar stores, other discount retailers, and e-commerce giants.

Notably, Wal-mart also promised an increase in the minimum wage paid to employees while also looking to form a stronger online presence.

For more on the push by Wal-mart, click here.

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