Kroger, Walmart fining suppliers for late deliveries

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Kroger, Walmart fining suppliers for late deliveries

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Grocers like Kroger and Walmart are fining suppliers for late or incomplete deliveries, according to The Wall Street Journal.

Grocers lose approximately $75 billion annually in sales due to out-of-stocks and unsaleable goods. To combat the loss in sales, Kroger is charging suppliers $500 per day for deliveries made past a two-day window, and Walmart charges fines against companies that cost about 3 percent of the value of each late or incomplete delivery, according to the WSJ.

“It’s a massive opportunity from a financial and customer standpoint,” Robert Clark, senior vice president for merchandising at Kroger, told the WSJ.

The push to offset late delivery cost comes as the industry competes with Amazon’s disruption into the grocery business. Amazon acquired Whole Foods earlier this year, promising to slash prices and implement convenient technology within stores.

Grocers will enforce on-time deliveries even more starting next year. By February, Walmart will require deliveries to come in on time approximately 95 percent of the time, according to Bloomberg. Manufacturers and delivery companies that fail to meet those standards could likely find themselves out of a contract with Walmart.

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