We’ve heard before, how he mega-food retailers wield almost unbelievable power over producers and manufacturers. That may be the lever Walmart is pulling to offer deep price cuts on what it calls ‘essentials’ over the summer…
In response to relentless calls from consumers and advocacy groups, one mega-supermarket is drop-ping prices on food and certain other ‘household essentials’ over the summer. How can Walmart do this while competitors say THEY can’t?
Using the Power for good?
Walmart is the biggest retailer in the US, and one of the biggest food retailers, in particular. Low everyday prices are the obvious reason. But the family-rooted chain is now answering pleas from American families from all walks of life for even lower food prices.
The company has, in the past, been criticised for controlling its suppliers by selling shelf placement to brands that are willing to pay. And charging brands a premium to get their products on the shelves in the first place.
It reminds one of the classic American classic story, of the criminal who had an epiphany and swore, thereafter, to use his powers for good, not evil…
Might be legit…
It’s important to state, right off the top, that the mechanisms behind the Walmart cuts may be legit-imate.
Big supermarkets have, for years, leveraged their huge buying power to get discounts from suppliers, so they can offer specials to customers as a means of getting shoppers into the store. And the same retailers continually offer what they call loss leaders – products sold for a limited time at or below cost price – to draw consumers.
But, then… Why aren’t the other big food chains doing the same?
Long-term commitment
The deep reductions Walmart has instituted are in effect now, and will apparently remain so for the whole summer. No specific end date to the program has been announced.
Walmart Canada is apparently not participating in the US mother company’s special price cuts, but regular ‘rollback’ specials and other discounts will continue to be offered.
Some examples:
In its official announcement:Walmart lists some representative examples from among the 250 products receiving summer price cuts.
- 1 lb. 73% Ground Beef Roll, Fresh ($5.94, was $6.74)
- Fresh Sweet Corn on the Cob ($0.25 each, was $0.68)
- Fresh Red Cherries 2.25 lb. bag ($5.63, was $11.18)
- Great Value Ice Cream 48 fl. oz ($2.50, was $2.97)
- Lay’s Classic Potato Chips 8 oz bag ($2.50, was $2.97)
- Frito-Lay Family Fun Variety Pack, 18-count ($8.97, was $9.97)
- Great Value Disposable Paper Plates, 200-count ($8.97, was $9.97)
- Coca-Cola, Diet Coke and Coca-Cola Zero Sugar 24-packs ($9.97, was $14.97)
- Pepsi, Diet Pepsi, Dr. Pepper and Diet Mountain Dew 24-packs ($9.97, was $13.97)
Some cuts deeper than others…
Some products, notably selected packaged meats fresh produce items and Coke and Pepsi fizzy bevs, are being cut much lower than other packaged goods such as Lay’s salty snacks, ice cream and paper (‘cookout’) plates.
Which suggests that Walmart conducted separate negotiations with a range of different suppliers on its chosen range of ‘summer essentials’.
My take
It’s encouraging to see that Walmart has done some magic and lowered prices significantly on some ‘summer essentials’. But at the same time, it’s discouraging to see the variance, from product to product, in the reductions. Price drops, in fact, range from about 12 percent (on ground beef), to around 30 percent (on sodas), to about 50 percent on fresh produce items such as corn on the cob.
Which suggests, Walmart isn’t hurting a bit on the profit side, while it’s squeezed suppliers for the difference…
~ Maggie J.