• Home >> News & Events
  • Walmart asks suppliers to cut ads to save money


    NEW YORK — Walmart is asking suppliers to cut back on advertising spending in its stores as it seeks lower prices on goods that it sells to its own customers.

    The request comes as the world’s largest retailer, based in Bentonville, Arkansas, tries to reclaim its position as the low-price leader amid stiff competition and sluggish sales in the U.S.

    Click Here!

    Historically, makers of consumer products such as laundry detergent devote a portion of their budget to marketing their products at Walmart, whether through store displays or online ads in social media. Walmart executives told suppliers to please reinvest some of that money instead.

    Deisha Barnett, a Walmart spokeswoman, confirmed the strategy and said the discounter has made such a request in the past. The recent overture, she said, is more of a “reinvigorated focus.”

    Walmart updated investors this week on how it planned to reduce prices while revving up its assortment and improving the experience of shoppers by the holiday 2015 shopping season, the most important period for a retailer.

    The actions are being spearheaded by Greg Foran, who last summer became CEO of Walmart’s U.S. business, which accounts for 60 percent of its total sales.

    “We want this year to be the year of improving our stores,” Foran told investors.

    Foran, who had been president and CEO of Walmart Asia, has been dissecting every part of the business, from improving the freshness of the produce to making sure merchandise is being unloaded onto the selling floor instead of piling up in the backroom.

    Among other measures Walmart outlined: reducing the price of products nearing their expiration date, a strategy it believes alone will save $500 million annually.

    The company said it’s also looking at how it chooses the source of its products, so that it can reduce prices, particularly as commodity prices fall.

    Walmart has acknowledged it took some productivity steps — such as reducing labor in stores — that ended up backfiring. It said it was working to reverse that problem.

    In February, it announced it was raising the starting wage to at least $10 an hour by February 2016 and was improving training. It also said it was bringing back the department manager as the person in charge of a specific area of merchandise.


    © 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.