Walmart's Mexico unit has penalized food companies supplying groceries to r...
MEXICO CITY - Walmart’s Mexico unit has penalized food companies supplying groceries to rival Amazon, pressure that has forced some to pull their products from the world’s largest online retailer, four people familiar with the matter said.
Walmart last year demanded discounts from food businesses whose products it found priced lower on the Mexican website of Amazon.com Inc, the people said, even though suppliers had no say in the Seattle retailer’s decision to undercut Walmart on price. “We could never tell anybody that they can’t sell to someone else,” Ignacio Caride, Walmart Mexico’s e-commerce head, told Reuters.
Supermarket analyst Bill Bishop said Walmart wants to avoid a repeat of its experience in the United States, where Amazon quickly took the lead in online grocery sales. Walmart Inc’s Mexico unit is its second-largest overseas market by sales after the United Kingdom, on par with Canada.“They’re worried that Amazon will grow in Mexico,” said Bishop, co-founder of retail advisory firm Brick Meets Click in Barrington, Illinois.
Instead of lowering its retail prices to match those of Amazon, Walmart took it out on them, the vendors said. Walmart docked their payments by the retail price difference, multiplied by the amount of stock in its inventory, a move that cost them tens of thousands of dollars collectively, the people said.
Both companies have been pressuring suppliers for the lowest prices on goods from t-shirts to bicycles. And Walmart has spent big to build up its shopping website, delivery network and cloud computing infrastructure to compete with Amazon online.
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