First TVs, now tortillas: US companies cut prices to stop discounting | Tech Reddy

NEW YORK, Nov 17 (Reuters) – Makers of everything from toys to tortillas are increasingly setting lower prices on their goods to maintain profits and reduce cost cuts as retailers such as Walmart Inc ( WMT.N ) and Amazon.com Inc ( AMZN.O) ) try to hold sales to each other online.

As a result, consumers face fewer discounts on everyday purchases at a time when inflation is around 8%, and as retailers look to unload hundreds of billions of dollars of excess inventory. read more

For many years manufacturers have set the lowest price at which retailers can sell certain big-ticket items such as televisions. They wanted to stop customers who took an item off the showroom floor, then went online to find it advertised by another seller at a lower price, to buy it there.

Now, as consumers cling to the habit of buying household essentials online, companies such as Colgate-Palmolive Co ( CL.N ) have in recent months implemented what are known as low-cost policies for inexpensive products like Optic White Pro. toothpaste series on Amazon, a person familiar with the matter said.

The Pro Series toothpaste, now priced at $9.96 on Amazon, is a high-margin product that Colgate wants to protect its profits amid rising costs. read more As a result, consumers have struggled to find the lowest sales price anywhere.

Toymaker Hasbro Inc ( HAS.O ) wants retailers to keep any published prices above specified levels from $6.99 to $33.99 for Monopoly, Twister, Chutes & Ladders and 21 other games and toys, except for holiday shopping, according to the company. memo seen by Reuters.

Online shopping for consumer staples, along with Amazon’s cut-throat competition with Walmart Inc ( WMT.N ), have driven many consumer product makers to set price limits on low-cost products, e-commerce consultants say.

Mr. Tortilla, which makes food-friendly tortillas sold online by Walmart and Amazon, decided to set lower prices as it expands sales, aiming to keep prices consistent across e-commerce retailers, said Ron Alcazar, chief executive officer. company performance.

“We’re seeing welcome categories (these standards) never had, like food and beverage,” said Jack Gale, account manager at PriceSpider, which has seen 120% year-over-year growth in the number of brands using its products. which help to enforce these price standards from 2018.

IT IS ILLEGAL IN EUROPE

While legal in the United States, these policies are illegal in many countries, including across Europe in many cases.

Contracts that dictate the sales price between the seller and the manufacturer are also illegal in some states including California and Maryland.

Amazon’s part in these pricing standards stems from its commitment to offering products that are as cheap, or lower, than competitors like Walmart. This forces brands that sell large volumes of goods on Amazon to set, and then enforce, a minimum price. Otherwise, they face diminishing returns.

Amazon’s sellers and sellers on its platform can be judged by bad placement on Amazon.com, among other things, if the company finds lower prices on goods elsewhere, e-commerce consultants say.

“We have no role in creating or maintaining their acceptance,” an Amazon spokesperson said when asked about the published pricing policies. “Like any store, we reserve the right not to display uncompetitive prices compared to other major retailers. We always set our prices independently.”

The California lawsuit filed against Amazon’s claims must comply with the rules established by Amazon that lead to products being accepted and enforce the advertised price policies.

US Representative David Cicilline, who is working on a proposed antitrust law aimed at lowering prices, said, “Amazon often abuses its power to coerce sellers and suppliers, preventing them from offering lower prices elsewhere.”

Amazon said in response that it does not prevent sellers from offering lower prices elsewhere.

A 2007 United States Supreme Court decision allowing “within reason” agreements on wholesale prices between retailers and suppliers helped set the stage for the expansion of these pricing policies.

Reporting by Jessica DiNapoli; Edited by Vanessa O’Connell and Chris Sanders

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