Walmart tells buyers are on alert as grocery bills rise
Key takeaways:
- Walmart Chief Financial Officer Brett Biggs stated the retailer’s research shows buyers are paying attention to costs, even if they aren’t selling down to more affordable brands or purchasing smaller packages.
- The big-box retailer stated it has the same number of rollbacks, or interim price drops, as it did at the end of the first quarter in 2021.
- “During times of inflation like this, middle-income households, lower-middle-income families, even richer families become more price-sensitive,” CEO Doug McMillon told on an income call. “And that’s to our benefit.”
Grocery bill climbs according to a statement by Walmart:
Walmart Chief Financial Officer Brett Biggs stated that buyers aren’t trading down to more inexpensive brands, purchasing smaller packages, or cutting over discretionary items. Still, they are paying attention to increasing costs.
“We haven’t seen any observed changes at this point is how they’re shopping,” Biggs stated in a Thursday interview with CNBC. But, he added, “we do know, we’ve seen, and we heard through our studies that individuals are concentrating on inflation, and they’re noticing that in their daily lives.”
Inflation pushes up food, fuel, vehicles, and other everyday products.
According to the Labor Department, the customer cost index grew by 7.5% in January compared with the year-earlier period, the most rapid jump in four decades. Food prices are up 7% over the previous year — and grocery is Walmart’s most significant sales type.
Those rising expenses have become a focal point for investors, who notice if and when Americans’ spending patterns change.
Household fundings may get shrunk by a second factor, too: As the Covid omicron surge decreases, customers may begin to spend more on commuting or eating out.
“Even though you may get prices being passed along in one piece of the [shopping] basket, you may be able to do some things in the other part of the basket to make it function overall,” Biggs stated.