Wal-Mart Works to Lower Food Costs

Every time I hear someone complaining and moaning about Wal-Mart, I like to point to this kind of story. Food prices are soaring, we all know that. But instead of caving to it, Wal-Mart is doing something about it, by forcing its suppliers to trim costs. I liked this effort:

Ever wonder why that cereal box is only two-thirds full? Foodmakers love big boxes because they serve as billboards on store shelves. Wal-Mart has been working to change that by promising suppliers that their shelf space won't shrink even if their boxes do. As a result, some of its vendors have reengineered their packaging. General Mills' (GIS, Fortune 500) Hamburger Helper is now made with denser pasta shapes, allowing the same amount of food to fit into a 20% smaller box at the same price. The change has saved 890,000 pounds of paper fiber and eliminated 500 trucks from the road, giving General Mills a cushion to absorb some of the rising costs.

I don't like big cereal boxes because they don't fit so well in my cabinets. Make em smaller, it is ludicrous since the top 1/4 of a cereal box or other boxed goods is empty air.

This is how Wal-Mart does business. They constantly push their vendors and suppliers to cut cots, which keeps the prices down, which saves American a lot of money every year. The vendors do it, because they don't sell just to Wal-Mart but other chains as well, and if they are saving money and keeping price increases less drastic, they still make money in the end.