Tuesday, July 17, 2007

Wal-de-Mart and the Profit Eaters

Following my earlier post on Lost Profits, a row has blown up between Asda (part of Wal-Mart) and Bloomsbury (publisher of some obscure children's book).

Potter publisher halts Asda order, BBC News July 17th 2007

The facts are (not surprisingly) disputed. But there is a suggestion that Asda has failed to pay in full for previous Harry Potter books. I don't know what has happened in this case, but supermarkets often apply retrospective discounts to their suppliers - paying less than the agreed price.

Supermarkets typically defend their price-cutting stance, and their aggression towards suppliers, by claiming that they represent the interests of consumers. In this case, Asda is claiming that the Harry Potter book is too expensive for children. Obviously Asda wants to make sure the children have some pocket money left for sweets as well.

It seems a bit late in the day for Bloomsbury to take a principled stance against commercial bullying by a large retailer, if that's what's happening. Or for that matter for Asda/Wal-Mart to complain about a publisher profiting from a blockbuster. Presumably some last-minute deal will be struck. But if Asda allegedly doesn't pay its bills BEFORE it's got its hands on the last Harry Potter book, it's hardly going to pay its bills AFTERWARDS. Can anyone trust Wal-de-Mart?

Business Organization Management: Retail

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