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(Fortune Magazine) -- With gas, grain, and dairy prices exploding, you'd think the biggest seller of corn flakes and Cocoa Puffs would be getting hit by rising food costs. But Wal-Mart has temporarily rolled back prices on hundreds of food items by as much as 30% this year. How? By pressuring vendors to take costs out of the supply chain.
"When our grocery suppliers bring price increases, we don't just accept them," says Pamela Kohn, Wal-Mart's general merchandise manager for perishables.
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Originally posted by TheComte
This only means the suppliers take the extra hit and in some cases may close down if they can't absorb the costs. In the short term this may seem to be good for the average consumer. But, long term, this will probably lead to more regional shortages as suppliers close down or refuse to sell to Walmart.