Wal-Mart revamps buying to save billions

5 January 2010

5 January 2010 | Jake Kanter

Retail giant Wal-Mart hopes to save up to $12 billion (£7.5 billion) as part of a purchasing overhaul.

According to the Financial Times this week, the retail giant plans to consolidate its store purchasing and increase the amount of goods it buys direct from suppliers, rather than through procurement outsourcing firms.

Eduardo Castro-Wright, vice chairman of Wal-Mart Stores, estimates that buying 80 per cent of products directly from suppliers could save between $4 billion and $12 billion over the next five years.

After piloting a scheme to coordinate the purchase of apples across stores in the US, Canada and Mexico, the retailer will expand this to other fresh fruit and vegetables in the regions. Other categories considered for the programme include seafood, frozen food and dry packaged groceries.

Wal-Mart has also set up four global merchandising centres for goods and clothing as part of efforts to combine purchasing for the 15 countries in which it operates.

A Wal-Mart spokeswoman confirmed the details.

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