Walmart Chief Executive Officer Doug McMillon said even wealthier families are struggling as inflation pushes up grocery prices.
In an interview on CNBC’s “Squawk on the street“On Monday, the leader of the nation’s largest grocer said fiscal second-quarter sales were up from new customers and more frequent trips from low-income households. $100,000 or more annually. reported earnings and revenue expectations exceeded expectations over a three-month period, after lowered its profit outlook last month.
“People are really focused on price, regardless of income level,” McMillon tells CNBC’s Courtney Reagan. “And the longer this goes on, the more true it will be.”
Inflation has growing at the fastest rate in decades. The prices consumers pay for goods and services rose 8.5% in July from a year ago, according to the Bureau of Labor Statistics. Gas prices have dropped recently, but grocery prices are still very high.
Food prices up 10.9% in the 12 months to July. Many daily commodities have gone much higher, including the price of eggs up 38% and the price of coffee up more than 20%.
McMillon said food prices started rising late last year, and the company noticed a shift in consumer buying patterns even among those with higher incomes around mid-March. When people feel stressed by the summer holidays or saving for the back-to-school season, he says they start buying fewer clothes and other discretionary items – an incentive that discounters expect to continue. customary.
Plus, McMillon added, he’s not sure that food prices have peaked. However, he said, “it’s a contradictory period when you look at the data.”
For example, retailers have had to cancel orders and heavily discount discretionary goods as people spend more on necessities. On the other hand, he said that back-to-school supplies are also selling well, as well as cheap menswear.
