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Chapter 500 Meat on the Felt Board

Just as Elena had predicted, something happened. Gallup wanted to find WShop, but was it too late?

"You want us to help resolve this through communication? I haven't even held you accountable for this yet, and you've already come knocking on my door. Isn't that a bit too wishful thinking?" Cicero's tone on the other end of the phone seemed calm, but Elena keenly caught the anger hidden in his words.

As the nominal management group of Wawa, Cicero's anger is understandable.

"What about Gallup? Is he planning to just run away and become a coward?"

Before Elena could explain, Cicero pressed on, his tone noticeably angrier this time: "Do you realize the devastating impact your actions have had on the entire WShop Group's supply chain? You even dared to falsify the weight labels on your sandwich fillings, with some ingredients weighing a full 42% less than the stated amount. Do you think consumers are blind and stupid?"

These words instantly widened Elena's eyes considerably. Just as she had thought, the other party already knew everything about Wawa's problems.

"The suppliers are very upset right now. My phone has been ringing off the hook with calls from them over the past two hours, especially from PepsiCo, who have made it clear that..."

Cicero's complaints lasted for a full twenty minutes, during which his dissatisfaction and rebukes grew increasingly intense, to the point that he was almost swearing.

After hanging up the phone, Elena irritably ripped off her pearl earring. The delicate jewelry landed on the table with a crisp sound, but it did nothing to quell the nameless anger surging within her.

When she returned to the conference room, all of Wawa's senior management personnel were present, each with a solemn expression on their face.

The moment she stepped into the meeting room, Gallup immediately interrupted everyone else, his expression anxious, and asked impatiently, "What's the situation? What did WShop say?"

Elena slowly shook her head, her eyes filled with helplessness, and replied in a heavy tone, "The situation is not optimistic. Due to our violations, the WShop Group is facing collective accountability from major suppliers. PepsiCo's attitude is the most tough, and it has made it clear that all Wawa stores are no longer allowed to purchase its products at the WShop Group's cooperative prices. The supply price of all Pepsi products supplied to Wawa must be increased by 12%."

"12%? That's practically a sanction! Wouldn't it be more direct if they just asked us to stop stocking Pepsi products?" The purchasing director interjected gravely upon hearing this.

A 12% price increase is simply unacceptable for Wawa. It's not just a matter of compressing profit margins; it's that Wawa simply doesn't have much profit margin left.

Elena sighed softly and added, "I'm afraid the situation is more serious than we anticipated. From what Cicero said, Pepsi isn't the only supplier expressing dissatisfaction with us. Pepsi's actions could very well be a trigger, and other suppliers are very likely to follow suit and take similar price increase measures."

These words immediately plunged the conference room into a deathly silence.

If all suppliers follow suit and raise prices, especially with such punitive price increases, then Wawa's product supply costs, including rent and labor costs, will be almost indistinguishable from the selling price.

Once a company loses its profits, it can't expand, and may even face the risk of a broken cash flow; the interest on its debts can be overwhelming.

This problem is too serious, but no one dares to express their opinion easily, because everyone knows that the instigator of this crisis is Gallup, who is sitting in the main seat.

Flash sale.

Gallup grasped the key point, and everyone else had thought of it too.

If it weren't for human intervention, Pepsi wouldn't have been able to suddenly raise its supply prices by 12%.

Let alone 12%, even a 3% increase would make Wawa uncomfortable, and it has even exceeded the purchase price Wawa paid before joining the WShop Group.

Pepsi's statement clearly indicates that they don't want Wawa to sell their products. From a business perspective, this is an absolute misconception; it would be detrimental to Pepsi in every way.

Such a decision, which deviates from conventional business logic, must have been driven by certain forces.

The only thing that could have prompted Pepsi to make this decision was the flash sale.

Flash sales are currently generating phenomenal daily sales figures, with daily sales equivalent to the combined daily sales of two Walmart groups.

For Pepsi, Flash Sale is undoubtedly an important strategic partner, and if Flash Sale makes a move, Pepsi will definitely give them that face.

If the flash sale stops subsidizing Pepsi products on its platform, Pepsi will face huge sales losses, a consequence it absolutely cannot afford.

Another point is, how did Pepsi know that Wawa was using a large amount of near-expiry food?

Despite these suppliers having strict regulations on product sales dates, many stores need to recall products when they have less than the specified number of days remaining in their shelf life.

These products will enter the discount market, mainly to prevent the collapse of the price system and the problem of all stores lowering prices together in order to increase sales.

However, these suppliers usually turn a blind eye to such violations near the expiration date.

The news about Wawa is spreading too fast, and the response is too swift. Someone must have tipped them off and put pressure on them.

Pepsi will not be the only supplier to raise prices; more suppliers will follow suit and impose punitive sanctions on Wawa by significantly increasing their supply prices.

The ultimate goal of this series of actions is simple: to turn Wawa into fish on the chopping block of flash sales, leaving it at their mercy.

"What did they say about the flash sale?" Gallup asked again, his gaze fixed on Elena.

Elena looked troubled and reported truthfully, "There is currently no one at Flash Sale to handle this matter. I tried to contact all the senior managers at Flash Sale, but they all said that Affili had given the order to handle this personally."

"But Afei's secretary said that the other party was chairing a high-level meeting and did not have time to answer the phone, and refused my call request."

"That's clearly an excuse!" Gallup said categorically.

While other executives at Flash Sale could be reached, Afei refused to speak, citing a high-level meeting as the reason. Doesn't that seem a bit too fake?

Elena nodded silently, adding, "Their intention is clear: they are trying to wear us down and build up leverage for future negotiations, so that they can gain absolute dominance in future talks."

"Then keep in touch. We must get in touch with Affil no matter what," Gallup instructed.

Regardless, this incident reveals a crucial piece of information: the other party is willing to talk.

As soon as he finished speaking, Gallup seemed to suddenly realize something. His expression instantly darkened, and his tone became ruthless. "Immediately launch a thorough investigation of all stores and departments. I must find this mole hiding inside!"

This matter is clearly not that simple, and it could not possibly be caused by the increase in complaints at Wawa stores alone.

Listen to Cicero's explanation. He can even pinpoint the exact percentage reduction in Wawa sandwich filling, which suggests there's a mole within Wawa, since this reduction only started tomorrow and was previously reduced to 75%.

Those sandwiches from Wawa's own factory are stored in the store's warehouse area, exclusively for delivery customers.

Even with a large number of complaints that triggered the flash sale's freezing mechanism, isn't this investigation a bit too detailed and too fast?

Regarding the issue of near-expiry food, Gallup has already assigned someone to investigate. The results show that there were only a handful of related complaints, which did not have a significant impact and should not have triggered such a strong reaction from suppliers.

Even more shockingly, they were fully aware of Wawa's internal violations, such as relabeling and reselling recycled food products.

All of this seemed extremely abnormal. The only reasonable explanation was that there was a mole within Wawa, otherwise, the other party could not have known this information so quickly.

Wawa has begun its own investigation, but the connection between Elena and Flashbuy has not yet yielded good results.

Meanwhile, the president of the flash sale company she wanted to contact, Afeier, was in a meeting and was on the phone with Massim.

"Why isn't Ernst answering his phone? Where is he?"

Afei thought the other person was talking nonsense. "How could I possibly know his schedule?"

There was a moment of silence on the other end of the phone, then Massim's voice came through again, "What's going on at the Wawa stores? Why haven't they taken any action yet?"

"Aren't we already taking action?" Affil said calmly.

"You know what I'm talking about." Massim's voice deepened. "You have a wealth of evidence, why haven't you reported it? What are you trying to do?"

"Not doing what?" Afei's lips curled slightly. "Ernst said that the negative impact that Wawa has brought to flash sales must be resolved by them."

"What do you mean?" Massim asked.

Affili reassured them, "Don't worry, what's yours won't run away."