- 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.
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.
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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.
"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.
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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.
Does Walmart have to honor prices? ›
Walmart typically matches prices on identical items, including brand, model, size, and quantity. It's important to check the details of the price match policy for any exclusions or limitations.
How to do a price adjustment at Walmart? ›
Walmart's price adjustment policy requires a price match to be completed at the time of purchase. If you want to acquire an item at a lower price after making your purchase, you will need to return your item and repurchase it at the lower price.
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.
Who am I hurting by shopping at Walmart time? ›
“The anticompetitive effects of discriminatory pricing and product supply directed to certain businesses (sometimes but not always small and medium-sized businesses) ripple through the entire supply chain—harming consumers as well as independent producers,” they wrote in the letter.
Are Walmart prices the same in-store as online? ›
The short answer is: no. Walmart's prices aren't always the same. In-store and online prices tend to fluctuate based on many factors. This means you won't always get the same deals for identical products — even though you're shopping with the same company.
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.
Does Walmart price match if the price drops? ›
In addition, Walmart does not match competitors' prices both in-store and online. The retailer will also not match items purchased from Walmart.com that later decrease in price on the site, and they won't do a price match offered by third-party sellers on their site.
Do stores have to honor the price on the shelf? ›
No, the store is required by law to charge you the lowest of the advertised or posted price. When there is an overcharge, many stores have a policy to refund part of the price or give you the item free, but they are not required to do so under weights and measures laws.
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."
What is the price adjustment rule? ›
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.
How do you get strike through prices at Walmart? ›
The submitted promotional price will need to be at least 10% lower than the “Was Price” to receive strikethrough pricing and a “Reduced Price” or “Clearance” flag. If you submit a normal price update and offer a price that is lower than the “Was Price” strikethrough pricing will automatically apply.
Why did Walmart price drop? ›
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.
How does Walmart have such low prices? ›
Direct sourcing: Walmart's EDLP strategy is built on direct sourcing. It allows them to bypass traditional middlemen and negotiate lower prices from manufacturers. This can help keep prices low for both sellers and consumers.
Why is Walmart losing so much money? ›
One piece of crucial information in Walmart's statement is that the stores' annual losses doubled over the last 5 years. What has happened over the past five years? The outbreak of covid and the resulting global pandemic, which scared off people from visiting stores.
What is low pricing strategy of Walmart? ›
In everyday low pricing strategy, products are priced lower than those of other brands or retailers. These prices would remain low over a long period compared to reduced prices offered during deals or discounts. Walmart commands a huge share of the CPG retail channel in the US.
