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More supply chain breaking news

Last week's announcement by Wal-Mart that it had set up a partnership with Li & Fung is big news. Perhaps not for UK corner shops today. But read on and think how this deal could make Asda stronger over the next five years.

Li & Fung started out as a company that sourced products in China for wholesalers and distributors. It then moved into distribution and beyond. For example, today it runs shops in south east Asia for brands like Calvin Klein and Gant. It provides marketing, logistics and manufacturing services.

"As we do not own any brands, we devote all our resources and efforts to supporting our clients," it says on its website.

Now Wal-Mart seems to agree, saying that it will save between $4bn to $12bn on purchasing over the next five years. That is a lot of extra profit...or support to shoppers in the form of lower prices.

The challenge is for UK wholesale suppliers of corner shops to come up with something similar. Local retailers need to pay attention to their announcements and switch to the supplier that will keep their business moving forward.

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  1. Unknown4 February 2010 at 21:03

    Totally agree. The small retailers are being squeezed out of the market. Last week Asda ran a promotion where they were selling Mr Muscle Kitchen/Bathroom/Window cleaners 2 for £1. Now as a retailer it costs me 89p from the cheapest wholesaler. How can we compete with thier buying power!!!

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