Close this search box.
Close this search box.

Walmart Puts New Pressures on its U.S. Suppliers

With Walmart on the top-5 client list of thousands of U.S. manufacturers, it’s not surprising that many providers are feeling the heat of new pressures in their relationship from America’s largest retailer.

These pressures range from demands for new margin-squeezing storage fees and longer-payment schedules to Walmart’s expectation that it suppliers will help the company meet its vaunted goals for boosting domestically made products.

Walmart may be reacting to a number of factors with its new pressures on manufacturers, including its decision to boost the wages of its lowest-paid workers this year and also the fact that sales at its U.S. stores have flattened out over the last couple of years.

In any event, suppliers are saying that changes laid out for vendors in June are requiring them to pay new fees for using Walmart’s warehouses and for shelf space in new stores, according to letters obtained by Bloomberg News and its interview with suppliers and industry consultants. Also under the new rules, many suppliers will be paid for their goods less frequently, depending on how quickly a supplier’s inventory moves.

This move comes on the heels of Walmart’s actions earlier this year to push suppliers to cut marketing and promotion expenditures and use the savings to lower their wholesale prices so that Walmart could pass the savings at retail on to its customers.

“What’s shocking is that Walmart is being aggressive not in asking suppliers to take costs out of the system, but instead in adding cost into the system.”

“What is so shocking this round is that [Walmart is] being aggressive not in asking suppliers to take costs out of the system so the supplier can lower prices, but instead adding cost into the system,” Leon Nicholas, a senior vice president at Kantar Retail, which advises dozens of Walmart suppliers, told Bloomberg. “It looks as though they are trying to have it both ways and trying to adjust their own margins where they are facing cost pressure.”

Walmart said the new fees aren’t an effort to offset wage increases for store workers, but rather part of an overall strategy to boost U.S. store performance. “It isn’t always going to be easy for our suppliers,” a Walmart spokeswoman told the news service. “But we firmly believe driving everyday low cost that gets to everyday low price has proven to wow our customers. It increases sales volumes for us and our suppliers.”

Meanwhile, Walmart also continues to press suppliers to try to find ways to source and make more of their products in the United States. The company has pledged to spend an additional $250 billion on U.S.-made products over the next decade, but has been coming up short in terms of worthy targets for its spending so far.

To that end, Walmart teamed up with ThomasNet to create a platform that will help vendors find U.S.-made products. ThomasNet has half a million U.S. suppliers on its ThomasNet/Corporate Edition site, with which larger suppliers can communicate.

As Walmart continues to adjust to the “new normal” in its U.S. business, including higher wages and less enthused consumers, expect the huge chain to continue to turn to its suppliers for help.


  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events


    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)


    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.