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Various suppliers are reportedly working along with Walmart to reduce the overall prices. According to some senior Walmart executives, these suppliers are responding to the retailer’s efforts despite facing high inflation and surging labor as well as material costs.
Investors have called on Walmart’s ability to work with suppliers to reduce costs over claims that the retailer is too focused on protecting its margins. Walmart CEO Doug McMillon revealed that Walmart is focusing on ordering further out or requesting changes in pack sizes to allow suppliers to control their costs.
The development comes after Walmart disclosed plans of opening new fulfillment centers in the U.S. in the upcoming years. The retailer intends to double its storage efforts and double down on its delivery efforts in the country.
To soften the impact of inflation on households, Walmart will work on limiting price hikes on basic consumer goods such as macaroni and cheese as well as canned tuna, the CEO added. The retailer is also planning to reduce the prices of home goods and apparel to attract high-income individuals as well as those squeezed by inflation.
Apart from the price surge, Walmart is tackling an inventory increase owing to shifting purchasing patterns regarding food and other basic goods. Sources with relevant information claimed that inventories have seen a 32% growth during the first quarter of this year, of which at least a fifth came after some merchandise arrived earlier than expected.
Setting the inventory right will be the primary focus for Walmart, especially after its profits failed to surpass profit estimations. A couple more quarters are likely to be required for Walmart to be back on track, sources claimed.
In other developments, Walmart has reportedly partnered with clothing retail company Gap Inc. to launch a collection of curtains, bedding, room accents, and rugs for kids. This partnership echoes Walmart’s efforts to expand into new retailing categories, with the new collection expected to consist of around 200 new items.
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