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Walmart CEO expects US prices to fall in coming months | Consumer | Deflation | Federal Reserve System

[Великая Эпоха, 17 ноября 2023 г.](Detailed reporting by Epoch Times reporter Lee Yang) Largest retailer in the United States.WalmartCEO Doug McMillon expects this could happen as prices for general merchandise and staples such as eggs, chicken and seafood fall.deflationtrend.

WalmartFinancial results for the third quarter will be published on Thursday (16th). “In the United States, we could go through a period of deflation in the next few months,” MacMillan said during the earnings call. “While that will put more pressure on us, we’re still excited about it because it’s better for our customers.”

While Walmart is selling groceries and essentials in the U.S. at higher prices than they were a year ago, they are also significantly higher than they were two years ago. But McMillan said growth is slowing and may even start to reverse.

Since the outbreak of COVID-19, food prices in the United States have increased by 25%.

If that happens, he said, WalmartconsumerWe may start to see this in the coming months.deflation, that is, a fall in prices for groceries and consumer goods. Dry groceries include food items such as canned goods and pasta, while consumer goods include everyday items such as toothpaste. He added that commodity prices could fall “a little more sharply than they have in the last few weeks or months.”

Even if overall prices don’t fall from last year, MacMillan’s comments highlightfedFollowing aggressive US interest rate hikesinflationIt has begun to slow, in stark contrast to the post-pandemic rise in inflation to multi-year highs.

McMillan’s comments echo recent remarks from other retailers and government officials.

The US Department of Labor announced on Tuesday that in OctoberconsumerThe price index (CPI) remained unchanged from the previous month, with core CPI growth hitting a two-year low. Richard McPhail, Home Depot’s chief financial officer, recently stated: “inflationThe worst for the environment is behind us.”

MacMillan believes the potential deflation of staples will free up shoppers’ budgets to spend more on everyday items. This is a win for Walmart since these products tend to be more profitable.

Although Walmart on Thursday reported third-quarter sales and earnings that beat market expectations, Walmart is again feeling pressure from inflation. Walmart CFO John David Rainey told CNBC that consumers will wait for discounts before purchasing items, such as Black Friday sales.

Walmart shares fell 8.1% on Thursday, their biggest drop since May 2022.

Price levels for some U.S. food categories remain a concern, McMillan said, adding that this is putting pressure on consumers. However, he said overall product prices will continue to fall, putting Walmart in a good position heading into the holiday shopping season.

Additionally, during periods of high inflation, many affluent consumers in the United States turned to Walmart for their purchases.

Neil Saunders, an analyst at GlobalData, doesn’t think that’s the case, saying, “Americans are still under financial stress and still trying to make the most of every penny, so Walmart may be a necessity for many people.” a place to go.”

(This article links to reports from Bloomberg and CNBC.)

Responsible Editor: Lee Moen#

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