After years of meeting demands for ever cheaper prices, many Wal-Mart Stores Inc. suppliers are saying no to new margin-squeezing storage fees and a payment schedule that could delay for months how quickly some are paid.
The world’s largest retailer says the changes, laid out for vendors starting in June, reflect a push to simplify its relationships with suppliers, put them all on the same footing and reduce costs so it can offer customers the lowest prices. But some vendors see the new policy as an attempt by Wal-Mart to fatten its margins and offset wage hikes for store workers earlier this year.
Saying the new fees will hurt their own bottom lines, several vendors are hiring lawyers, and a top executive from at least one supplier visited Wal-Mart’s headquarters in Bentonville, Arkansas, in hopes of reversing all or some of the new terms. Two large suppliers with well-known brands that asked not to be identified for fear of hurting their relationship with Wal-Mart have refused to accept the terms and plan to use their size as leverage to negotiate a better deal.