Source : Procurement Leaders

Wal-Mart, which bought a controlling stake in Massmart last year, has said it plans to host local South African suppliers at its US headquarters to share its price-cutting philosophy

According to BusinessReport, the retailer plans to host 10 local suppliers in Arkansas next month to engage with them on the business’s long-period price-reduction business model. Massmart, which owns stores such as Game, Makro and Dion Wired, said suppliers and customers had benefited in its 10-week extended price cut promotions.

The acquisition of Massmart by Wal-Mart was the subject of much controversy and was dogged by the threat of government intervention over concerns that Wal-Mart’s sourcing policies would lead to local businesses suffering. Wal-Mart has made moves since to demonstrate a commitment to the local supplier market – without compromising its core business values.

Massmart merchandising executive Jon Martinek said: “It is not only consumers who win. Suppliers also stand to benefit from these promotions, specifically if they are able to forecast production needs optimally.”
“The result is that we now receive proactive enquiries from suppliers requesting the opportunity to be included in these promotions,” Martinek said.

Don Frieson, an executive at Walmart, said suppliers could be successful in longer-term price reduction activities in two primary areas: cost-savings and growing the brand.

“Lowering prices and offering better value allows existing customers and a new pool of potential customers to make repeat purchases more often…and outstanding cost-saving benefit through a more predictable supply chain,” Frieson said.