Retail

Wal-Mart feeling a 'ton' of pressure: Analyst

Walmart suppliers fight over new terms: RPT
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Walmart suppliers fight over new terms: RPT

A battle between Wal-Mart and some of its suppliers likely stems from the "ton" of pressure the retail giant is feeling these days, CNBC retail analyst Stacey Widlitz said Friday.

A few months ago, Wal-Mart began charging suppliers a fee for storage and for shelf space in its stores and many vendors are now pushing back, with some even hiring lawyers, according to Bloomberg. Suppliers also claim a new payment schedule could delay how quickly some are paid, the report said.

A Wal-Mart employee pushes grocery carts at a store in Miami.
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Widlitz believes recent wage hikes and upcoming health-care costs are weighing on the retailer. It is also cleaning up its stores and investing in training, she said. However, she thinks the real problem is Amazon.

"Amazon is forcing Wal-Mart and other companies to step up and spend shareholder money to get in the game in terms of e-commerce and it's pressuring profitably and they're pushing back on their suppliers to make up for it," the president of SW Retail Advisors said in an interview with CNBC's "Closing Bell."

Wal-Mart said move is about getting back to its everyday low price model. In a statement to CNBC, Wal-Mart said, "We're looking at creating greater consistency to even out the playing field across the suppliers. We've looked across retail and other industries and believe what we're doing here is what companies are doing in an effort to do great business."

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Joe Feldman, senior managing director for Telsey Advisory Group, agrees Wal-Mart's new terms are pretty standard practice in retail.

While Wal-Mart is feeling pressure from its competitors and is going after e-commerce in a big way, the move isn't about that, he said.

"It's about making things a little more simple, and any good retailer is going after the suppliers," Feldman told "Closing Bell."

"They're trying to pass on those lower costs to the consumer."

—CNBC's Laura Petti contributed to this report.

Disclosure: Telsey Advisory Group provides investment banking and other non-investment banking securities related services, and non-securities services and may seek such relationships from companies about whom it provides research.