If we've heard it once, we've heard it a couple of dozen times. If gas was the reason manufacturer prices went up in 2008, retailers and wholesalers are wondering why they haven't come back down. Of course, most of these conversations have been in the background but now industry leaders such as Supervalu CEO Jeff Noddle are saying publicly that their companies are ready to do "battle" with manufacturers.
Many food manufacturers, as a Dow Jones Newswire report points out, have resisted rolling back prices even as numerous categories have seen declines in unit volume.
Mr. Noddle told analysts on a conference call that manufacturers are not likely to give in unless they see further share erosion to private label or if economic conditions result in further volume losses.
"I look at the first six months as being the battleground," he said.
Mr. Noddle expects that companies such as his will win the fight. "I think they're (vendors) going to be forced initially into more trade spending and then ultimately bringing prices down."
Discussion Questions: How is the economy affecting the relationship between retailers/wholesalers and their vendors? Are there valid reasons for manufacturers to be resisting price cuts? Will the pushback on prices from large companies such as Supervalu benefit smaller retailers and wholesalers?