Walmart CEO: Inflation on toys, apparel and sporting goods is down | Popgen Tech
Shoppers finally got some good price news, with inflation falling on discretionary items just in time for the holidays, Walmart CEO Doug McMillon said Tuesday.
“In toys, sporting goods, apparel and similar categories, prices have fallen more aggressively,” McMillan told CNBC. “We’re still overpriced, but not as overpriced as other categories.”
Toy prices rose 3.1% year-over-year in October, according to the latest data from the Bureau of Labor Statistics. Sports goods rose in price by 3%, clothing – by 4.1%. All three were below the overall inflation rate of 7%.
Although prices for these items are still rising, they are not rising as much as other categories because retailers misjudged consumer demand and stockpiled excess inventory. In order to clear goods and encourage customers to buy, stores have stepped up promotions.
Walmart ( WMT ) is the largest retailer in the United States, researching consumer habits and a wide range of products.
McMillon said inflation has been “most persistent” in packaged foods. Double-digit price increases for these essentials “will be with us for a while,” he said.
Customers have adjusted their grocery habits by switching from name brands to Walmart’s cheaper in-store brands, he said.
McMillon said budget-conscious customers are the hardest hit by inflation, but other shoppers “have money to spend.”
Kroger ( KR ) also said last week that food inflation is easing. The company expects inflation to be between 2.5% and 3% next year.
“If you look at our fresh departments, it’s clear that inflation is slowing in many categories,” Kroger CEO Rodney McMullen said on a call with analysts.