Retail

Makers of everything from toys to tortillas are increasingly setting minimum prices on their goods to maintain profits and limit price cutting as retailers like Walmart Inc. and Amazon.com Inc. try to grab sales from each other online, Reuters reported. As a result, shoppers face fewer discounts for everyday purchases at a time when inflation is around 8%, and as retailers look to unload hundreds of billions of dollars of excess inventory. For many years, manufacturers set the lowest price at which retailers could advertise certain big-ticket items like TVs. They wanted to stop shoppers who scoped out an item on the showroom floor, and then went online to find it advertised by another retailer at a lower price, from buying it there. Now, as shoppers stick with the pandemic habit of buying more household basics online, companies such as Colgate-Palmolive Co. have in recent months used what are known as minimum advertised price policies on less expensive products. While legal in the U.S., these policies are illegal in many countries, including across Europe in most cases. Agreements dictating the for-sale price between retailer and manufacturer are also not legal in some states including California and Maryland. Amazon's part in these pricing floors stems from its pledge to offer products priced as low as, or lower than, rivals like Walmart. This compels brands that sell huge volumes of goods on Amazon to set, and then enforce, a minimum price. Otherwise, they face shrinking profits.