CNBC reports that "Walmart CEO Doug McMillon says the retail giant is managing for inflation and a slowdown in consumer demand that extends into 2023, and the economic conditions are changing what shoppers will see on the shelves of the nation’s largest retailer.
“We’re managing this item by item, category by category,” McMillon says. “We have a plan and adjusted our inventory to be ready for this next year."
CNBC writes that "grocery sales, responsible for 56% of Walmart’s revenue, is a key inflation read for the McMillon and company."
“What we’re seeing is that if you take the fresh food categories, commodities, things like proteins, things are starting to move. Chicken right now is more expensive, but beef is down. Fruit and vegetable is in pretty good shape,” McMillon says. “But dry groceries, consumables is where we’re seeing the most stubborn and persistent inflation, mid double-digit inflation. And we’re not hearing from our suppliers looking forward that’s going to come down soon."
According to the piece, "McMillon said Walmart is continuing to look for new technology to maintain inventory and increase the speed of its e-commerce business. That includes a commitment to purchase thousands of delivery EVs from General Motors’ subsidiary BrightDrop and Canoo; the opening of next-gen fulfillment centers that use automation and artificial intelligence; and the acquisition of robotics startup Alert Innovation."
- KC's View:
If fresh food costs are under control for the most part, and packaged food prices are staying stubbornly high, isn't this a great time for retailers to try to move shoppers into fresh food categories that tend to be higher-margin and more differentiating? Maybe this is a time to turn traditional metrics on their head, and reorient food businesses toward food, with less of a focus on bottles and bags and cartons and jars.