Walmart CEO Doug McMillon said Monday that US consumers “remain stressed” as customers at the retail giant continue to face higher prices.
“We have some more budget-conscious customers already under inflationary pressure for many months,” Walmart head (NYSE:WMT) told CNBC. “I think the lingering pressure in some categories is something that customers are having to deal with as we get closer to Christmas.”
McMillon describes budget-conscious consumers as being “pressured” by higher prices, though he added, “there are still plenty of people with money to spend.”
“What I can see is [the consumer] are being prioritized,” he said.
Looking at its position in the market, McMillon argues that WMT has grown recently because of its appeal as a value shopping destination, attracting customers looking to save money in times of high inflation. .
Walmart executives reported that inflation was most “stubborn” in its dry grocery business, which includes products like processed foods. He noted that “double-digit inflation rates have been around for a while” in this category and “look like they’re going to be with us for a while.”
Although WMT has slipped in recent weeks, the retailer’s stock has overall been bullish since early October. Shares have rallied about 18% over the past two months. WMT is also now higher for the year, showing an increase of around 5% in 2022.
This performance compares favorably with a diverse set of competitors. Low-cost retailer Dollar General (FIRE) is also showing gains for 2022, up nearly 4% year-to-date. However, Costco (PRICE) and Target (TGT) have all decreased significantly, with a decrease of 14% and 33% respectively in 2022.
Meanwhile, Amazon (AMZN), which has been affected by the overall trend away from technology stocks, has fallen 47% since the end of 2021. By comparison, the overall S&P 500 index (SP500) (spy) fell 17% by 2022.