Target wants suppliers to bear more of promotions costs

Chicago

US retailer Target Corp is asking many suppliers to take on up to an extra 3-5 per cent of the cost of promotions and price cuts after slow sales so far this year.

Retailers often use price discounts combined with promotions - such as two-for-one offers - to sell slow-moving items and make room for newer products.

Suppliers also have their own offers and advertising, and usually negotiate with retailers on how the cost of these promotional budgets will be split.

A dozen suppliers confirmed to Reuters in May that Target has demanded they take on more of the costs of marketing and selling slow-moving items, from candy to electronics.

The size of these costs varies on a case-by-case basis, they said, and are confidential. In total, during the year ending Jan 30, 2016, suppliers gave Target US$379 million to fund suc…