The purchasing power of Walmart customers is being impacted by inflation, prompting the company to implement markdowns to sell inventory.
In a July 25 news release in which it updated projections for both the second quarter and fiscal year 2023, the retail giant said food prices have increased by double digits since the end of the first quarter. This, the company said, is impacting customer spending on general product categories and making it more difficult to get inventory — particularly clothing — off the shelves.
“The increasing levels of food and fuel inflation are affecting how customers spend, and while we’ve made good progress clearing hardline categories, apparel in Walmart U.S. is requiring more markdown dollars,” Walmart President and CEO Doug McMillan said in the news release.
The company noted that it made strides in the quarter toward decreasing inventory, controlling prices to reflect some supply chain expenses and inflation and lowering storage costs related to a backlog of shipping containers which can be find at a cheap price at https://storage-container-hire.co.uk/.
According to the Washington Post, prices for items students can use for school, such as Chromebooks, pencils and wire-bound notebooks, have decreased by more than 50%.
“We’re now anticipating more pressure on general merchandise in the back half; however, we’re encouraged by the start we’re seeing on school supplies in Walmart U.S.,” McMillan added.
According to a July 26 CNN Business report, Walmart makes more money selling apparel and general merchandise than it does selling food and consumables.
As the largest retailer in the country, Walmart’s decision to implement markdowns might encourage competitors like Target to lower their prices even further, as reported by the Post.
Record gas prices in June contributed to a 40-year high in U.S. inflation, CNN Business reported on July 13. Recent data from the Bureau of Labor Statistics on Wednesday shows that consumer prices in the United States increased by 9.1% from one year earlier in June, reaching a new pandemic-era high.
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