Thanks for bringing all the detail on how this all went down. It's disappointing, but not surprising. When I was at a mid size CPG, and in my consulting work with Big CPG, price sloping followed that Walmart was to be at a 10% value to grocery. So list prices were all in line, but EDLP was the trade discount, every day, for WMT. There's a very intentional strategy depending on which grocery retailers run HI LO vs at some index to WMT that brands follow. So price is "legally" manipulated in this way. The picture the Pepsi violation paints is they went out with a lower List. Do I have this right?
thanks for this Errol! Important work. One piece I don't follow is in your intro: "Is it also a coincidence that there is very little big box presence, that the many cooperatives and indies in NYC could not reflect national big box pricing on competitive items? "
This has also confused me. But, by what you're saying wouldn't national big boxes have LOWer prices than the coops and indies in NYC? So shouldn't they be more competitive and attractive to all the people? So then shouldn't they succeed?
Thanks for checking in. There has typically been community resistance to opening Walmarts in the city and even their smaller neighborhood market formats would have a hard time with the real estate costs, even if communities okayed. New York grocery is also very neighborhood focused, with different chains popular in different areas, like Food Bazaar, Key Food, Morton, etc. I'll also admit this statement is supposition that could be backed up by the unsealed documents and is very relevant to challenges that even public sector stores will face unless the behavior is banned.
Thanks for bringing all the detail on how this all went down. It's disappointing, but not surprising. When I was at a mid size CPG, and in my consulting work with Big CPG, price sloping followed that Walmart was to be at a 10% value to grocery. So list prices were all in line, but EDLP was the trade discount, every day, for WMT. There's a very intentional strategy depending on which grocery retailers run HI LO vs at some index to WMT that brands follow. So price is "legally" manipulated in this way. The picture the Pepsi violation paints is they went out with a lower List. Do I have this right?
thanks for this Errol! Important work. One piece I don't follow is in your intro: "Is it also a coincidence that there is very little big box presence, that the many cooperatives and indies in NYC could not reflect national big box pricing on competitive items? "
This has also confused me. But, by what you're saying wouldn't national big boxes have LOWer prices than the coops and indies in NYC? So shouldn't they be more competitive and attractive to all the people? So then shouldn't they succeed?
Help me follow your logic! Thanks!
Thanks for checking in. There has typically been community resistance to opening Walmarts in the city and even their smaller neighborhood market formats would have a hard time with the real estate costs, even if communities okayed. New York grocery is also very neighborhood focused, with different chains popular in different areas, like Food Bazaar, Key Food, Morton, etc. I'll also admit this statement is supposition that could be backed up by the unsealed documents and is very relevant to challenges that even public sector stores will face unless the behavior is banned.