NEW YORK ( TheStreet) -- Wal-Mart ( WMT) will be most affected by price inflation, according to Citi. The discounter only has 30% direct sourcing, which means it has less control over supplier price hikes, according to a report released by the firm, and published by Business Insider. Wal-Mart's core business of selling basics to lower-income shoppers also puts it at more of a risk. J.C. Penney ( JCP) was identified as the retailer most insulated from price inflation. The department store has a long history of developing its own private labels, and 48% of its merchandise is sourced directly. J.C. Penney was also one of the first companies to complete its buying for 2011, allowing it to lock in prices, according to Citi. Cotton prices have more than doubled over the past year, hitting an all-time high of $2 a pound on Thursday. --Written by Jeanine Poggi in New York. >To contact the writer of this article, click here: Jeanine Poggi. >To follow the writer on Twitter, go to http://twitter.com/jpoggi. >To submit a news tip, send an email to: firstname.lastname@example.org.