The single retailer that should be most terrified by price inflation is Wal-Mart.
Citi identifies two reasons for concern.
First, sourcing prowess. Wal-Mart has only 30% direct sourcing, which means it has less control over supplier price hikes.
JCPenny leads the field with 48% direct sourcing. Also, JCP was the first company to complete its buying for 2011, allowing it to secure lower prices.
Second, the sensitivity matrix. Wal-Mart sells basic items to poor people, which is the most sensitive quadrant to price hikes.
Don’t miss: 16 Facts About Walmart That Will Blow Your Mind
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