Executive Briefings

Wal-Mart Cuts Fat Out of Food Supply Chain. How?

With gas, grain, and dairy prices exploding, you'd think the biggest seller of corn flakes and Cocoa Puffs would be getting hit by rising food costs. But Wal-Mart has temporarily rolled back prices on hundreds of food items by as much as 30 percent this year. How? By pressuring vendors to take costs out of the supply chain.
"When our grocery suppliers bring price increases, we don't just accept them," says Pamela Kohn, Wal-Mart's general merchandise manager for perishables. To be sure, Wal-Mart isn't the only retailer working to cut fat from the food chain, but as the largest grocer--Wal-Mart's food and consumables revenue is nearly $100bn--it has a disproportionate amount of leverage. How's the retailer throw its weight around?
Source: Fortune, http://money.cnn.com

With gas, grain, and dairy prices exploding, you'd think the biggest seller of corn flakes and Cocoa Puffs would be getting hit by rising food costs. But Wal-Mart has temporarily rolled back prices on hundreds of food items by as much as 30 percent this year. How? By pressuring vendors to take costs out of the supply chain.
"When our grocery suppliers bring price increases, we don't just accept them," says Pamela Kohn, Wal-Mart's general merchandise manager for perishables. To be sure, Wal-Mart isn't the only retailer working to cut fat from the food chain, but as the largest grocer--Wal-Mart's food and consumables revenue is nearly $100bn--it has a disproportionate amount of leverage. How's the retailer throw its weight around?
Source: Fortune, http://money.cnn.com