It's referring to the anecdote of Vlasic, a pickle manufacturer, and it's woes of being a supplier to Wal-Mart. Basically, Wal-Mart negotiated hard with Vlasic to provide gallon(!) jars of pickles at at much lower margins than the company was used to.

That nationwide Wal-Mart "every day low price" cannibalized sales of smaller pickle units at other stores and Vlasic saw it's profits on pickles fall 25%.

In unrelated news, Vlasic filed for bankruptcy a few years later.

The entire tale is told in much better narrative by a 2003 Fats Company article: http://www.fastcompany.com/node/47593/print