UBS Report: Walmart is Changing and Moving Fast

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August 3, 2010

Recent management changes and subsequent tactical shifts at Walmart -- including the mass retailers pursuit of a more “vendor-friendly philosophy – are good news for CPG companies, according to a new UBS Walmart report.

The changes will mean “rapid re-implementation of action alley (key for the many impulse categories in CPG), no more surprise/deep rollbacks, and more collaboration between Walmart’s buyers and the vendor community,” according to the report. “This should lead to better visibility/profitability for CPG vendors.”

UBS research and analysis also revealed that Walmart’s rollbacks did not meet the company’s “internal return thresholds” and that it is focused on moving back to a pre-Project Impact merchandising philosophy. “Walmart’s buyer community has been directed to ‘collaborate/listen/partner’ with the vendor community — a reversal of the adversarial relationship that become the norm over the past two years.”

The report also reviews the current and projected impact on some of Walmart’s key vendors, including Cott (with 36 percent of its sales derived from Walmart), Clorox (26 percent), Energizer (25 percent), Church & Dwight (25 percent), Ralcorp (17 percent), Proctor & Gamble (16 percent) and ConAgra (15 percent).

Read These Related Articles:

• Walmart Reduces Food and Staple Prices
• Walmart Replaces Cut SKUs, Recommits to Price Rollbacks
• Aggressive Competition Forces Walmart to Test Even Smaller Formats
• Walmart's Green Initiatives Challenge Pallet and Packaging Industries
• Walmart Takes Over Supplier Deliveries

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