- Walmart said inflation was flat in its latest quarter, and revenue growth came from selling more items and drawing more visits to its stores and website, rather than higher prices.
- Yet prices have remained high in some parts of the store, such as dry groceries and processed foods.
- Prices at consumer brands, including Walmart, have faced more scrutiny from both consumers and politicians.
Prices of many groceries and other items have fallen at Walmart, according to CEO Doug McMillon.
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Yet the leader of the nation's largest retailer said Thursday that inflation "has been more stubborn" in one particular part of the store: The aisles that carry dry groceries and processed foods. Those include items like carbonated soft drinks.
On a call after the discounter posted fiscal second-quarter earnings, he said Walmart has pressured suppliers that stock its shelves to cut prices. But he called on those companies to do more.
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"We have less upward pressure, but there are some that are still talking about cost increases, and we're fighting back on that aggressively because we think prices need to come down," he said.
Walmart's overall inflation was flat for the quarter, and revenue growth came from selling more units, not charging higher prices, Chief Financial Officer John David Rainey told CNBC. But price dynamics weren't consistent across products: prices continued to go up for dairy, eggs, sugar and meat, and leveled off or dropped for items including pet food, apples, potatoes, strawberries, sporting goods, and lawn and garden items.
Walmart's quarterly results sparked a rally in other retail stocks, including Target, Best Buy and Macy's on Thursday. Both the big-box discounter's results and better-than-expected retail sales numbers defied concerns of a consumer slowdown.
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Walmart beat on the top and bottom line and raised its forecast to reflect a stronger first half of the year. Rainey told CNBC consumers have continued to be "choiceful, discerning [and] value-seeking," but the company's leaders "don't see any additional fraying of consumer health."
All consumer brands, including Walmart, have been under more scrutiny from shoppers and even politicians as frustration with pricier goods persists — and McMillon's comments about Walmart's suppliers underscore how much pressure grocers have faced. Walmart drew criticism on TikTok for rolling out electronic price labels for store shelves, with some users contending the company will use the technology to hike prices when demand spikes. (Walmart, for its part, has said it has no plans to change its approach to pricing and added the new price tags to save store workers' time.)
Many brands have taken pains to emphasize value or roll out new deals, particularly as consumers get more selective about where they spend their dollars.
McDonald's, for example, launched a $5 value meal in late June and decided to extend the offer in most markets. Target in late May said it would cut prices on about 5,000 frequently shopped items throughout the summer, such as peanut butter, milk and meat.
Walmart is also touting discounts. The retailer said it had 7,200 "rollbacks," its term for short-term deals, across categories in the quarter that ended July 31. That number included a 35% year-over-year increase in the number of rollbacks for food.
While Walmart's profits are growing faster than sales, McMillon said that's because of growth outside of retail in higher-margin businesses like advertising — not higher prices on goods.
"We're not raising prices. We're lowering prices," McMillon said. "We don't want product margins to go up. When we talk about margin improvement in our company, it's business mix."
FAQs
Prices of many groceries and other items have fallen at Walmart , according to CEO Doug McMillon. Yet the leader of the nation's largest retailer said Thursday that inflation “has been more stubborn” in one particular part of the store: The aisles that carry dry groceries and processed foods.
Why are Walmart prices different at different locations? ›
Why is there a price difference between Walmart stores? Prices may vary from store to store because each store is required to manage its own inventory. Therefore, a manager may lower a price to clear out an overstock item, to reward customers with an in-store sale, or to compete with local merchants.
How do I get a price drop alert from Walmart? ›
Sign up with Visualping to monitor any Walmart product page and get notified of price drops and deals you can't miss.
- STEP 1: Enter the URL you want to monitor.
- STEP 2: Enter your email address. Start monitoring (it's free)
Generally speaking, Walmart will price match items found on its own website or in a specific list of online competitors, which can include major retailers like Amazon, Best Buy, and Target. However, there are a few key points parents should keep in mind: Eligibility: Not all items are eligible for price matching.
Can I request for a refund if the price drops at Walmart? ›
Yes, you may be eligible for a price adjustment at Walmart. Check Walmart's price adjustment policy, and if it allows for adjustments within a certain time frame, bring your receipt to the store or contact customer service to request a refund for the price difference.
What is the Walmart pricing scandal? ›
In the lawsuit, an Ohio man says he purchased more than a dozen items from a Walmart store in Illinois in 2022. But the man claims prices for some of the items rung up 10-to-15- percent higher than the shelf price. The lawsuit also alleges there were similar discrepancies in stores in five other states.
Is Walmart price gouging? ›
Walmart's price increases have been slammed by a former U.S. labor secretary, who accused the retailer of driving inflation by engaging in "price gouging." Robert Reich, a professor of public policy at University of California Berkeley, said Walmart's price increases on its house brands led to revenue soaring.
Who am I hurting by shopping at Walmart time? ›
In an era of runaway inflation, who doesn't want the lowest prices they can get? But during the pandemic, it meant consumers living in lower-income areas far from big box stores weren't able to get the groceries they needed. And the rise of Walmart contributes to the demise of those independent stores, the grocers say.
How do you use the Walmart price scanner? ›
If you're in-store, you can use the Walmart app to scan barcodes.
- Open the Walmart app.
- Open the scanner. ...
- Scan the product's barcode.
- If there's a manufacturer offer, you'll see it on your screen. ...
- Scan the QR code at checkout to link your online account to your in-store transaction.
- On your Android device, open Chrome .
- At the top right, tap More Settings Google services.
- Turn Track prices on tabs on or off.
EDLP is a pricing strategy where a company maintains consistently low prices for its products rather than offering frequent sales or discounts. Walmart has been using this strategy since the company was founded in 1962. It has helped them build a reputation for being a low-cost leader in the retail industry.
Does Walmart have predatory pricing? ›
Walmart is among the companies that have been accused of predatory pricing. In 1993, a judge ordered the retailer to stop selling drugs and health and beauty products below cost after three stores in Conway, Arkansas, accused the company of undercutting them to drive them out of business.
What is the price adjustment policy? ›
With price adjustments, retailers will refund a customer the difference in cost even if the item has already been used. Returns, on the other hand, usually need to be in unused condition. Some retailers have different policies for in-store purchase and online purchases.
Is Walmart lowering its prices? ›
Between the lines: Walmart said today that it has cut prices on 7,200 products in a bid to maintain what it calls "competitive price gaps" with its rivals. The company also raised its forecast for its fiscal year, saying it projects sales growth of 3.75% to 4.75%. Consumers, the company said, are "generally stable."
Does Walmart have the same prices in-store as online? ›
For a large quantity of Walmart inventory, you're going to get the same price online that you would find in-store — particularly for big-ticket items like TVs or white goods. But as we've already mentioned, you might find relatively big price differences on a lot of small items. These tend to cost more on Walmart.com.
Does Walmart have the same prices nationwide? ›
They price items at each store according to that store's expenses and what they think customers will pay. My local Walmarts have different prices in the same city.
What is dynamic pricing at Walmart? ›
Digital price tags are one of the ways that retailers are experimenting with what is more largely known as dynamic pricing. If a retailer gets a signal that sales are slowing down, or that the store is getting crowded, either way they can move prices up and down pretty much instantaneously.
What pricing strategy does Walmart use? ›
Walmart uses EDLP (Everyday Low Price), Market-oriented, and Fixed-rate pricing strategies, among which the EDLP is their core pricing ideology.
