Walmart Adds Pickup, Fuel Surcharges to Some Suppliers
Starting Aug. 1, suppliers that rely on Walmart’s “Collect” program to move their products to the company’s warehouses will have to pay a pickup charge based on the cost of goods received. In addition, they will have to face a fuel surcharge based on daily price changes, according to a memo from Walmart to the suppliers. Walmart is seeking to force suppliers to share rising freight costs after the retail giant cut its profit forecast in May and suffered the biggest one-day decline in its stock price since 1987. The shares have slipped further since then as investors question the company’s ability to withstand higher expenses for merchandise, transportation and labor.
Total Retail's Take: Like so many other retailers, Walmart is seeking ways to offset rising freight costs. This applies to both getting merchandise into its distribution centers and stores, as well as delivering orders to end customers that have purchased online. For the former, getting suppliers to defray some of the rising costs is one solution to the challenge, as is renegotiating contracts with third-party suppliers and diversifying your carrier mix to try and capitalize on optimized pricing. As for the latter, getting consumers to come to stores to pick up their online orders — and potentially make additional purchases once in-store — will become an even greater imperative for Walmart and other merchants like it that have an extensive physical store footprint. In the face of rising freight costs, buy online, pick up in-store (BOPIS) or curbside should and likely will be leaned into more by retailers.
