Walmart Warns of ‘Higher Prices’ Due to Inflation in 2023 — Makes Moves To Lower Costs 20%

Jan 9, 2020 Mountain View / CA/ USA - People shopping at a Walmart store in south San Francisco bay area.
Sundry Photography / Getty Images

Although inflation has been trending lower in the U.S. in recent months, the world’s biggest retailer has warned that it might still have to raise prices to deal with higher costs. The warning was issued by Walmart CFO John David Rainey during an investor’s meeting this week, Reuters reported.

“We’re assuming that this year is going to be somewhat anomalous… Still feeling the effects of higher prices,” Rainey said.

What that means for Walmart shoppers is hard to gauge right now. Rainey didn’t offer details on what items might be marked up in the coming months, other than saying that inflation continues to impact Walmart’s operations, according to Fox Business. Shoppers have added more lower-margin groceries to their carts over higher-margin apparel and home goods, Rainey said.

The Walmart CFO also said he expects inflation to be about 3% by the end of the year. That’s half of what it is now but still above the Federal Reserve’s target of 2%. The overall inflation rate rose 6% for the 12 months ending February 2023, according to the latest data from the U.S. Bureau of Labor Statistics. That was the smallest 12-month increase since the period ending September 2021 and well below the 9.1% rate seen last summer.

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Despite the recent dip, prices remain historically high for many consumer staples — including food and other grocery items, some of which are still rising in double digits.

As previously reported by GOBankingRates, a study from the value investing site ValueWalk found that Walmart grocery prices climbed by 21.5% between 2019 and 2022, with much of the increase coming during the inflation spike that started in late 2021.

The prospect of more price hikes this year comes amid a move by Walmart to cut costs through automation and payroll reductions.

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The retailer suggested that roughly two-thirds of its 5,000-plus stores are expected to employ some form of automation by the end of its 2026 fiscal year. This should help Walmart reduce excess inventory, which was a major problem for retailers last year as consumers curbed spending.

The automation initiative, expected to lower average unit costs by about 20%, will also likely lead to fewer employees at Walmart. The company recently announced that it will lay off hundreds of workers at five fulfillment facilities and also said it will close 10 U.S.-based stores this year.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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