Wal-Mart Presses Suppliers to Cut Prices Wal-Mart is telling suppliers to forgo investments in joint marketing with the retailer and plow the savings into lower prices instead.
Makers of branded consumer products from diapers to yogurt typically earmark a portion of their budgets for marketing with Wal-Mart, spending on things like eye-catching product displays and online advertisements.
Wal-Mart has long had a reputation for pressing its suppliers to cut costs to help lower prices, but the retailer’s new leadership has embraced the concept with fresh vigor. (…)
With the growth of dollar stores and other discounters, Wal-Mart is facing ever more competition on price, which for many customers is the most important selling point. (…)
OPEC oil output hits highest level since October
OPEC supply has risen in March to 30.63 million barrels per day (bpd) from a revised 30.07 million bpd in February, according to the survey based on shipping data and information from sources at oil companies, OPEC and consultants. (…)
Besides Saudi Arabia, the main reasons for the rise are the resolution of involuntary outages – Iraq lifted exports due to improved weather and Libya managed to nudge production higher despite unrest.
If the total remains unrevised at 30.63 million bpd, March’s supply would be OPEC’s highest since 30.64 million bpd in October, 2014, based on Reuters surveys. (…)
Based on this survey, Iraq’s exports have come close to December’s record high of 2.94 million bpd, depending on whether tankers at the southern ports earlier on Tuesday actually depart in March. Iraq was hoping to reach 3 million bpd of exports this month.
Saudi Arabia has increased output to within a whisker of 10 million bpd on average in March, sources in the survey said, due to higher demand from export customers and an increased local requirement in new oil refineries. (…)
Of countries with lower output in March, the biggest decline was in Angola, partly due to a force majeure on exports on BP’s Saturno crude stream. OPEC’s other West African producer Nigeria also exported fewer cargoes in March.
1 thought on “NEW$ & VIEW$ (1 APR. 2015)”
Walmart is experiencing the aftermath of the 2009 recession much like Canada did in the early 1990’s.
In the wake of the contraction in Canada in the early 1990’s, store brands like President’s Choice came to dominate the grocery space that was competing for dollars which were suddenly more scarce.
Walmart did expand their private label offerings in the aftermath of The Great Recession, but last year they back-pedaled somewhat, letting name brands buy up more shelf space at the expense of some Walmart private label products. This has left them vulnerable on private label, entry level products.
The problem with this strategy is price drops do not happen as quickly with the name brands as with the store brands. The name brands typically operate on a 12-month rolling futures cycle for their raw materials input costs. When combined with pressures for higher profits and better service levels for the customer, the name brands appear to have been brought back to a higher SKU count at Walmart as the lesser of two evils.
While Walmart private label items often have the same 12-month rolling futures input issues, they have far greater flexibility in pricing, which in turn, drives sales.
I think Walmart failed to learn the lessons of the Canada grocery business in the early 90’s, and they are playing trial and error instead of looking at some successful playbooks from the past.
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