These Two Retail Giants Just Might Be Inflation-Proof -- Here's Why
Inflation and transportation costs are taking a toll on stocks, and the issues may persist. Retail behemoths Walmart (NYSE: WMT) and Amazon (NASDAQ: AMZN) are leaning on new arrangements with suppliers to share the burden.
The companies have added surcharges to supplier contracts to account for higher gas and shipping costs, and there's not much they can do about it. The charges add an inflation-proof element to the two companies' stocks. Here's what it all means.
Michael Porter's book, Competitive Strategy: Techniques for Analyzing Industries and Competitors, outlined five forces that shape the competitive landscape of industries. One of Porter's five forces is supplier power. This refers to the fact that if the number of suppliers in an industry is high and switching costs are low, those suppliers have little leverage with buyers.
Source Fool.com
