Will Wal-Mart and Its Customers Pay More?
By George Anderson
The cost of energy and other raw material costs has continued to go up but consumers, for the most part, have been immune to inflationary pressures as both manufacturers and
retailers have held the line on prices.
Now, however, consumer product manufacturers are looking to raise prices on some goods but the question is, will retailers agree to pay more?
Scott Krugman, spokesperson for the National Retail Federation, told Bloomberg News, “The very last thing they want to do is to increase prices for the consumers.”
Barry Bosworth, a senior economist at the Brookings Institution, said, “Over the past few years, the pricing power in the marketplace has shifted away from the manufacturer to
the distributor-retailer like Wal-Mart. These chains are so big, they have the upper hand in setting prices. If products don’t sell, they eliminate them from the shelves.”
Wal-Mart’s Karen Burk said, “When suppliers bring price increases to us, we don’t just accept it. We ask them to show us that raw materials costs have actually gone up and that’s
the reason for the increase.’
Even then, said Ms. Burk, “if suppliers’ costs are going up, it doesn’t necessarily mean it’ll be reflected in our stores. If there’s any way we can not pass the price increase
on, we try not to.”
Moderator’s Comment: Will large retailers such as Wal-Mart accept the higher prices suppliers want to charge for goods? How would you describe the current
state of trade relations relative to pricing and other issues? –
George Anderson – Moderator