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February 2nd, 2009

Retailer Pushes for Price Drop



Retailers that were forced to raise their prices last year are beginning to pressure manufacturers to lower their prices as production costs have begun to decline:

Consumer-products makers raised prices last year after the cost of oil and pulp needed to make Huggies diapers, Charmin toilet paper and Kleenex tissues rose to records.

“There’s no way Wal-Mart is going to let their suppliers reap significant benefit from lower costs,” she [Grace Barnett, an analyst with Fitch Ratings in New York] said.

While it takes six to nine months before lower raw-material costs work their way through the manufacturing process, Wal-Mart is already in talks with suppliers to lower prices.

Keep this in mind: Wal-Mart has been one of the only retailers to maintain a profit during the downturn. Perhaps that fact remains because the world’s largest retailer has always been committed to providing its customers with quality products at the cheapest price.

Readers: Which products would you like to see decline in price first and foremost?

(story courtesy of ConsumerWorld.org)

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2 Responses to “Retailer Pushes for Price Drop”

  1. Rebecca Wilder Says: February 2nd, 2009 at 5:02 pm

    Hi Tim,

    I imagine that Wal-Mart has a lot more power than do the suppliers – what do you think?


  2. Tim Manni Says: February 3rd, 2009 at 9:21 am

    Hey Rebecca,

    I was wondering about that dynamic…Wal-Mart obviously has a lot of control or influence on their pricing structures. I also wouldn’t be surprised if somehow Wal-Mart was the only retailer to be able to lower prices, at least a while before anyone else.

    Good hearing from you,

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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