News
More Mark Downs good for shoppers, not good for Walmart Profits
By Dana Malcolm
Staff Writer
#USA, August 5, 2022 – Retail Giant Walmart says it expects dampened profits all the way to 2023 because of inflation in the US prompting fears of major losses for other retailers. The company updated its profit outlook for Q2 and 2023 on Monday (July 25) revealing a much lower profit outlook than before.
The company explained that people were shopping less and less even with markdowns.
“Food inflation is double digits and higher than at the end of Q1. This is affecting customers’ ability to spend on general merchandise.”
This is a slightly worse outlook from May this year when despite a major dip in profits the company still continued its signature price rollbacks and reported little decline in how much shoppers were buying. Initially Profits were only
“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. We’re now anticipating more pressure on general merchandise,” said Doug McMillon, Walmart Inc. President and Chief Executive Officer.
The pressure that American wallets are feeling is a bad sign for Caribbean nations who will be forced to endure the same conditions courtesy of the region’s incredibly high import bill.
But Walmart is cutting prices heavily on items like clothing which some analysts say could force other big retailers to cut prices as well which could actually work to help ease inflation. But that is a big ‘if’.
McMillion explained that people are now focusing on food essentials and it could mean the retail industry is going to take a hit. Walmart and other retailers including Target, Amazon and Best Buy stock fell sharply after the announcement.