They're well known for abusing their monopsony power to force brands to offshore production and reduce quality of products.
First they take on a product line and become a big % of the company's sales, then they start tightening the screws and demanding price cuts. The manufacturer has to either give up a large fraction of their total sales or use cost-cutting measures like offshoring and materials substitution to reduce their cost so they can sell at the price Wal-Mart demands. Wal-Mart does this incrementally over time so the company has already started down the road by the time they realize what's being done.
This was a big part of the manufacturing offshoring movement of the last few decades. Of course one company isn't solely responsible for that trend, but Wal-Mart with their huge size was a significant part of it. This was before Amazon was a thing. Now the damage is done and everyone seems to be forgetting that Wal-Mart had a hand in it.
This isn't anything new with Walmart, and it's pretty obvious that's going to happen if one retailer becomes your main customer. Walmart isn't forcing anyone to sell through them, or even to have different product lines (one crappy one for Walmart, another for other retailers), or even different brands. Basically, if you want to sell stuff to Walmart buyers, this is what you need to agree to. If you want to be a higher-end company, then don't deal with Walmart.
First they take on a product line and become a big % of the company's sales, then they start tightening the screws and demanding price cuts. The manufacturer has to either give up a large fraction of their total sales or use cost-cutting measures like offshoring and materials substitution to reduce their cost so they can sell at the price Wal-Mart demands. Wal-Mart does this incrementally over time so the company has already started down the road by the time they realize what's being done.
This was a big part of the manufacturing offshoring movement of the last few decades. Of course one company isn't solely responsible for that trend, but Wal-Mart with their huge size was a significant part of it. This was before Amazon was a thing. Now the damage is done and everyone seems to be forgetting that Wal-Mart had a hand in it.