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Retail’s Supply-Chain Dynamics Shifting

Stores seek to avoid overstocking.

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WendellandCarolyn/iStock
WendellandCarolyn/iStock

Relationships between retailers and their suppliers that shifted during the Covid-19 pandemic are morphing again, as companies cope with continuing changes in consumer spending and high costs across their supply chains, The Wall Street Journal reports.

Walmart Inc , Whole Foods Market and other large retailers are pressing suppliers to cut prices for goods, while others have been canceling orders for products from clothing to appliances. That is a stark change from as recently as a year ago, when companies were looking to rush in merchandise to restock depleted store shelves, the business newspaper reports.

Logistics experts say the retailers are looking to use their scale and buying power to gain greater control over their supply chains now that shortages have generally eased and supplier-buyer dynamics return to pre-pandemic norms.

“We’re starting to see the power shift a little bit back to buyers again,” Rob Handfield, a supply-chain management professor at North Carolina State University, told The Journal. “They’re starting to become a little more competitive with their suppliers and putting more pressure on them.”

More specifically, retailers are being increasingly cautious about ordering to avoid overstocking. That, in term, has sent suppliers scrambling to adjust to decreased demand and requests for lower pricing as they deal with the ongoing impact of inflation.

Click here to read the article’s start. (Note: Most of it sits behind the paper’s pay wall.)

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