Walmart Slotting Fees Will Hurt Smaller Brands With Little Room To Maneuver

Last June Walmart announced it would change payment terms and charge fees, including slotting (shelf space) fees and distribution center fees. It was a setback for smaller marketers and suppliers who, it is felt, may have to compensate for the increased costs by cutting back on innovation and marketing, a bad move because brands need to advertise to survive. Larger suppliers, like P&G and Clorox, have more flexibility. They can pressure their own suppliers and find other ways to trim costs. A former retail executive says the big question for younger, smaller brands is whether to “jump into the Walmart game at all” or figure out some way to build the business through other channels, like Amazon.com.