Wal-Mart plans influences profitability of other industries

Filed in archive Market Overview on April 20, 2006

This morning I read an interesting article in Financial Times about current inventory reduction plans by Wal-Mart. The company plans to reduce inventory are rippling through its main suppliers, reflecting its dominance in the US retailing industry.

Companies such as P&G, YRC (leading trucking company), and Spectrum Brands (the company makes Rayovac and Varta batteries) all reduced their profit forecast because of the recent strategy by Wal-Mart.

The key questions here are how long Wal-Mart can continue in this direction? Can the company sustain this strategy for a long time? What to do after suppliers lose Patience?