By Leah Nylen & Brendan Case, Bloomberg
When R.F. Buche buys Cheerios to stock his grocery and convenience stores in rural South Dakota, he pays $6.30 for an 18 ounce box. Walmart Inc. pays so much less that it can sell the cereal to customers for just $4.78.
That’s just one example where suppliers offer lower prices to big retailers than to the wholesalers who serve small grocers like Buche, forcing his customers — many of whom are poor and lack cars to travel to the nearest Walmart — to pay more.
“The pricing that these big box stores and chains are getting is made on the backs of us retailers who don’t have the strength to stand up and do anything about it,” said Buche, owner of Buche Foods and Gus Stops convenience stores. “We have no leverage, no negotiation power whatsoever.”
He and thousands of other small retailers hope to gain some relief in the Biden administration’s embrace of an antitrust law signed by President Franklin D. Roosevelt in 1936. Known as the Robinson-Patman Act, it was designed to counter the growing market dominance of the Great Atlantic & Pacific Tea Co. — better known as A&P — the largest grocery chain at the time.