In retail news, Wal-Mart’s (WMT) putting even more of a squeeze on suppliers to save costs, while Target (TGT) is trying out the big box approach.
Financial Times reporter Jonathan Birchall writes today that Wal-Mart is looking to cut out the middleman in its purchase of supplies and to buy for all regions in a unified fashion rather than letting each Wal-Mart geography purchase supplies separately. Wal-Mart buys less than a fifth of its supplies direct from manufacturers, and boosting that level could save the company from $4 billion to $12 billion in costs annually on sales of $400 billion, company executives told Birchall.
Meantime, Dow Jones Newswires’s Karen Talley writes (sorry, no link) today that Target is trying the “warehouse club” approach of Wal-Mart and Costco Wholesale (COST) by selling items such as toilet paper in bulk packaging over a multi-week trial period. The experiment is part of the company’s post-holiday selling push, and Talley quotes analysts as saying consumables such as toothpaste have driven traffic to stores, so it’s worth a shot for Target.
Wal-Mart shares today are up 80 cents, or 1.5%, at $54.25 while Target is up 15 cents, or 0.3%, at $48.52.
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