Report: Wal-Mart seeks lower supply chain costs, expanded grocery

New York – Wal-Mart Stores Inc. is reportedly asking suppliers to cut their product costs and also seeking to expand its grocery business. According to the Wall Street Journal, Wal-Mart is recommending that suppliers forego investing in joint marketing programs with the retailer and use that savings to reduce the price Wal-Mart pays for their goods.



During fiscal 2014, Wal-Mart’s U.S. profit fell and sales rose 3%, mostly due to new store openings. Suppliers will have less control of how their products are marketed and displayed at Wal-Mart as a result of reduced or eliminated joint marketing.



In addition, Greg Foran, president and CEO of Wal-Mart U.S., said at an April 1 analyst meeting that the retailer wants to expand its grocery business. Part of the rationale is positive feedback from customers in the Phoenix and Huntsville, Alabama markets, where Wal-Mart has been testing an expanded grocery offering.



Wal-Mart also plans to improve employee scheduling and benefits, in addition to wage increases announced earlier this year. Foran told analysts Wal-Mart has not ruled out introducing a loyalty program at some point, but the company thinks offering initial low prices is more important.