Well, it's not even so much that. In general, corporate actually knows better than the local guy how many of an item are selling, they see it in the reports. Local guys don't have any better information.
Local guys don't control pricing either, in general. That too is set by corporate.
What was common, and I think what he may have been talking about, was employees discounting things for certain people. That's the only time I can think of when you'd look at profit margins. Maybe something placed in clearance, or resold open box after a return. Or, for instance, we'd give our bigger clients a discount on bulk orders of printer paper if they asked. Paper was pretty close to a loss leader anyway, so we'd sell it at "cost" or maybe even very slightly below.
The other thing that's ambiguous about what he said (and Wal-Mart's numbers in general) is exactly how they compute margins. Wal-Mart runs their own distribution chain, so unlike a mom and pop, who simply buys a product for a set price including delivery, Wal-Mart buys the product for a lower price and deals with getting it to the stores themselves.
So they pad their "cost" as seen by the employees by some amount to account for the supply chain, which can include a profit, or so I was told. Meaning that a store could still sell an item at what they consider cost, but corporate Wal-Mart might still make money on it.
Also, the lowest level employees are not empowered to change prices, though the supervisors (next to lowest level) generally can. However it's very common for the average floor person to ask the supervisor "hey can I sell this to this guy for $x because it's open box and I need that space for the new seasonal products tomorrow anyway" and the supervisor to simply approve it.
Wal-Mart pays generous bonuses to stores for achieving certain profit amounts, so employees, knowing the margin, are encouraged to not dip below it where possible. Otherwise for all an employee cared, he'd sell everything for $1.