Walmart’s CEO warns that grocery store prices will continue to rise as inflation remains high.
Walmart is coping with inflation along with retailers across the country, leading to higher prices and dissatisfied customers.
This has led to lower consumer demand for stores that have historically positioned themselves as bargain retailers for everyday Americans.
CEO Doug McMillion said these economic conditions are changing what customers see on store shelves.
“We manage this item by item, by category,” McMillon said in an interview with CNBC. “We are planning and we are adjusting our inventory for next year.”
Overall, consumer prices rose 7.1% compared to last year, according to the Consumer Price Index for November.
The Department of Commerce also recently found that retail sales also plummeted by 0.6% for the month.
Food prices, in particular, rose sharply, up 10.5% year-on-year.
But not all products have sustained high prices, Walmart executives said.
Proteins in particular are diverse throughout.
“Poultry prices are high right now, but beef prices are down. Fruits and vegetables are in pretty good shape,” McMillon said in an interview with CNBC.
“But dry groceries and consumables are where we see the most stubborn and sustained inflation, mid-double digit inflation.
McMillon said he hadn’t heard from any of his suppliers, either, any hope that these prices would come down any time soon.
He acknowledged that we’re seeing price adjustments for general merchandise as customers aren’t buying as many, but he believes there’s still work to be done.
“We expect sustained inflation in pharmaceuticals, food and consumables for some time,” McMillon said.
How Walmart is adapting
McMillon said Walmart will look at new technologies to meet new market demands of high inflation and low demand.
This allows grocery chains to maintain inventory and increase the efficiency of their e-commerce business.
Specifically, Walmart has agreed to purchase thousands of electric delivery vehicles from BrightDrop (owned by General Motors) and Canoo.
A new fulfillment center that incorporates artificial intelligence will also open soon. The announcement comes around the same time that Walmart recently acquired robotics startup Alert He Innovations.
“There are so many possibilities with today’s technology in how we use data, how we make smarter algorithms work, how we deploy automation throughout the supply chain,” says McMillon.
Other ways to save
Even if inflation wrecks grocery prices across America, there are plenty of things you can do to save money when shopping at chains like Walmart.
For one thing, always buy store brand items over name brands.
This is said to save shoppers up to 30%.
The taste and quality of these products are also unlikely to be compromised.
IRi’s market research, cited by Ramsey Solutions, found that 75% of respondents believe the quality of store-branded merchandise is as good as that of mainstream domestic merchandise.
Loyalty app programs typically offer better deals and discounts than traditional coupons.
There are also free platforms like Ibotta and Fetch that give you cashback on every purchase.
With one clever hack, a Walmart supermarket shopper was able to purchase $100 worth of merchandise for just $30.
And another money-saving expert revealed where to check out the store’s best clearance items.