Walmart is going to charge its suppliers starting next month. They took this step in as the price of fuel is increasing day by day. This move will decrease the company’s expenses regarding transportation.
Other moves
Not only this. Walmart’s chief merchandising officer and chief operating officer for Walmart U.S. said the company will also impose a “collect pickup charge” calculated as a percentage of the cost of goods received and a fuel surcharge based on the cost of fuel to transport the goods.
According to a report by Reuters, “The move comes more than a month after Walmart, the nation’s largest retailer, cut its full-year profit outlook blaming rising costs of labor and fuel. Fuel costs, in particular, ran over $160 million higher than it had anticipated.
The Wall Street Journal first reported on the details of the memo, which was addressed to Walmart’s “Valued Collect Suppliers”
“This program is a result of Walmart adapting to the significant transformation and increased costs seen in the transportation industry over the past few years,” the memo sent on Friday read.
“The changes outlined… allow us to share cost accountability with our Collect suppliers, helping to enable us to meet our everyday low price commitment to our customers,” it said.
A Walmart spokesperson said while confirming the memo’s details, “The Collect program positions Walmart and participating suppliers to adapt to the dynamics of the current economic environment,”
Reaction of the suppliers who use Walmart’s services
Walmart sent mail about the charges they are going to put to the suppliers. “I have an unknown expense and nothing I can do about it,” said one supplier who received the email. “This is, for all intents and purposes, a retroactive charge,” since many suppliers already have product order agreements in place with Walmart for the coming year, said this person.
The world is yet to see how the other suppliers handle this matter.
