Take a look at this article for an idea about their selling practices:
http://www.fastcompany.com/magazine/77/walmart.html
While it's wonderful that they have low prices.. and I think it's godsend for people with low incomes.. it ultimately is hurting a lot of people, especially those with lower incomes.. alot of the folks that make the products that
walmart carries are losing their jobs because walmart is squeezing the suppliers profit margin in order to bring you those items at a lower cost. Many suppliers can not afford, *not* to have walmart carry their items.
Walmart is thee largest general merchandise/grocery retailer.. they no longer have any real rivals, in that category. They sell in a couple of months what Home Depot sells in a year (and home depot is the #2 retailer in the country) They are also the largest reatailer of cd's.. They are so big that they can dictate to their vendors everything from content, to packaging, to pricing.
The bottom line is it is good for the consumer who shops at Wal-Mart.
not if that comsumer had a job working at the vlassic pickle factory..
If Vlassic doesn't want to offer that deal at Wal-Mart, then lose money and don't sell products there.
It's not a matter of lose money or don't sell your product at walmart-- it quickly becomes a matter of whether or not to go out of business.. If they are responsible for 30% of your sales.. that is an enormous amount of income to try and make up for elsewhere.. and the problem is that walmart knows that and they use it to strong arm their vendors.
Their basic method is to lower prices, year after year on the basic staples of the store. Because they are so huge, the vendor's become dependent on them. Walmart might easily be responsible for 30% of your business.. when that happens, you really can't say 'no' to anything they ask for.. including, when they ask you to lower your price. So you do.. and in order to sell your item at the price, you lay off a couple of thousand employees, then next year walmart comes back and asks you to lower your price again.. there go another couple thousand employees, or maybe you move your production line overseas, now your employees are out of a job...
From the aricle:
"The gallon was hoisting Vlasic and hurting it at the same time.
Young remembers begging Wal-Mart for relief. "They said, 'No way,' " says Young. "We said we'll increase the price"--even $3.49 would have helped tremendously--"and they said, 'If you do that, all the other products of yours we buy, we'll stop buying.' It was a clear threat." Hunn recalls things a little differently, if just as ominously: "They said, 'We want the $2.97 gallon of pickles. If you don't do it, we'll see if someone else might.' I knew our competitors were saying to Wal-Mart, 'We'll do the $2.97 gallons if you give us your other business.' " Wal-Mart's business was so indispensable to Vlasic, and the gallon so central to the Wal-Mart relationship, that decisions about the future of the gallon were made at the CEO level.
Finally, Wal-Mart let Vlasic up for air. "The Wal-Mart guy's response was classic," Young recalls. "He said, 'Well, we've done to pickles what we did to orange juice. We've killed it. We can back off.' " Vlasic got to take it down to just over half a gallon of pickles, for $2.79. Not long after that, in January 2001, Vlasic filed for bankruptcy--although the gallon jar of pickles, everyone agrees, wasn't a critical factor."
Take a few minutes to read the article.. it's enlightening..
--heather
