Walmart has reported a decrease in prices for many groceries and other items, according to CEO Doug McMillon. Despite the overall downward trend, McMillon highlighted that inflation remains persistent in certain areas, particularly in dry groceries and processed foods, including carbonated soft drinks.
During a call following the retailer’s second-quarter earnings announcement, McMillon indicated that Walmart has been actively pressuring suppliers to lower prices but continues to face resistance from some. “We have less upward pressure, but there are some suppliers still discussing cost increases. We are pushing back aggressively because we believe prices should decline,” he stated.
Walmart’s Chief Financial Officer, John David Rainey, reported that inflation was flat for the quarter, with revenue growth attributed to increased sales volume rather than higher prices. However, price movements varied by product category: dairy, eggs, sugar, and meat saw continued price increases, while prices for pet food, apples, potatoes, strawberries, sporting goods, and lawn and garden items either stabilized or decreased.
The positive quarterly results led to a surge in retail stock prices, benefiting companies such as Target, Best Buy, and Macy’s. Walmart exceeded earnings expectations and raised its forecast based on a strong first half of the year. Rainey noted that while consumers remain “choiceful, discerning, and value-seeking,” there is no sign of further deterioration in consumer spending.
Consumer brands, including Walmart, face increased scrutiny over pricing, with some criticism directed at Walmart’s new electronic price labels. However, Walmart maintains that the technology is intended to save store workers’ time rather than facilitate price hikes.
In response to consumer demand for value, Walmart has promoted discounts through 7,200 “rollbacks,” a 35% increase in food rollbacks year-over-year. McMillon emphasized that Walmart’s profit growth is driven by higher-margin business segments like advertising, not by raising product prices. “We’re not raising prices. We’re lowering prices,” McMillon affirmed.
