Americans are breathing a sigh of relief because, for the first time since 2021, the annual inflation rate has dipped below three percent. And to celebrate, Walmart is slashing prices on 7,200 items. And this isn’t the first time in 2024 that Walmart has made headlines for reducing consumer costs. Grocery staples, including eggs, fresh fruit, and baked goods, have seen significant price reductions in the last year after several shoppers accused the big-box chain of “price gouging.” But with glowing profit margins, Walmart is confident that a storewide price decrease will only drive revenue up as customers are hungry for a bargain.
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“As it relates to value, we’re lowering prices,” Walmart CEO Doug McMillion announced in a second-quarter earnings call, as reported by Quartz.
The jaw-dropping news came after Walmart also revealed that its fiscal year forecast is set to increase between 3.75 percent and 4.75 percent, which exceeds Wall Street’s original projections. While sales are up across all categories, McMillion said food, general merchandise, and health/wellness are churning out the highest numbers.
“So far, we aren’t experiencing a weaker consumer overall,” he continued, adding elsewhere in the call that in-store foot traffic is “generally stable.”
Effective immediately, Walmart is cutting prices on 7,200 items within its stores. The discounted products will encompass a variety of categories, with grocery aisles reaping the most benefits. More specifically, customers will want to pay close attention to the store’s private label brand, Bettergoods.
An April 2024 press release describes Bettergoods as “unique, chef-inspired food at an incredible value.” The in-house brand offers 300 grocery products for under $15, with most items selling for under $5. According to Walmart, Bettergoods has cushioned sales immensely as more and more customers are searching for premium items at budget-friendly prices.
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The pivot to stocking shelves with in-house labels has been a win-win for both Walmart and its customers, according to Walmart CFO John David Rainey.
During the earnings call, Rainey reported that Walmart is “seeing private brand penetration continue to increase” and is “highly encouraged” by shoppers’ response to Bettergoods, per Axios.
While profit margins are projected to skyrocket, Rainey stressed that those numbers are contingent on keeping customers happy. It seems like Walmart is well aware that sticking to its “everyday low prices” is the strongest plan of action.
“We want to drive everyday low prices, and we’re not intending to achieve any of our margin performance by passing this along to our customers and members in the form of higher prices,” Rained stated.