The CEO of Walmart has warned vendors that higher prices won’t be tolerated if the economy deteriorates.
Using remarks from Chief Executive Doug McMillon’s speech to suppliers last month, The Wall Street Journal published this.
People with knowledge of the issue claim that McMillon informed suppliers to Walmart’s Sam’s Club locations that the retailer would oppose any pricing increases.
The CEO said that the introduction of new products will encourage people to buy more.
The report claims that competitors like Target and Amazon are employing a similar tactic, with big box stores canceling orders, rejecting price increases, and asking suppliers for discounts.
On, Walmart will release its financial results for the third quarter. Walmart is “better positioned to weather the uncertainties ahead,” according to Seeking Alpha’s pre-earnings analysis, which also noted that its extensive network of physical stores, which is frequently seen as a liability by many analysts, will be a huge asset.
As evidenced by the company’s second-quarter earnings, recent commentary claims that Walmart was “facing a stretched consumer who was reprioritizing shopping toward groceries and essentials and away from discretionary items in the face of high inflation, bulging inventories, and lots of promotional competition.”
Studies show that most consumers are still afraid of inflation, which affects their purchasing decisions and gives them the idea that price increases and income stagnation are unlikely to cease very soon.
According to the November research “Consumer Inflation Sentiment: Inflation’s Long Consumer Spending Shadow,” rising prices continue to be the largest economic concern, with two out of every three consumers very or extremely concerned about the outlook for the following months.
Consumers report feeling anxious about the future 80% of the time due to price increases, and 45% of the time due to difficulty paying their expenses.
