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Walmart CEO Says Grocery Prices Will Continue To Rise in 2025 Despite Wishes for Customer Relief
December 6, 2024
Walmart CEO Doug McMillon says consumers should expect to see higher prices at the grocery store for the foreseeable future. During the 2024 Morgan Stanley Global Consumer and Retail Conference, McMillon said that inflated food prices will likely remain at inflated levels and perhaps might continue to increase instead of decreasing.
“I’m disappointed to see food inflation start to tick back up. It’s primarily driven by eggs and what’s happening with dairy right now,” Walmart’s CEO said.
“But it’s not just those categories — there’s pressure on cocoa and some other inputs. So, we look at pricing compared to last week, last month, last year, but we also look at it compared to pre-pandemic. And if you look at all of the food, prices are a lot higher than they were before the pandemic, which is not what the customers want and not what we want.”
He continued, “We have some suppliers who are stepping forward to help drive volume, and we appreciate that very much and we want everybody to do that. And we have a lot of rollbacks, trying to get prices back down. Eggs and milk will adjust faster than dry grocery categories would, for example. But it feels to me like that processed food doesn’t go back down to pre-pandemic levels and may not come down much during this next year. But I would like to see customers get some relief on that side of the equation.”
Doug McMillon Claims Walmart Stands on 4 Dimensions of Customer Value
Walmart’s CEO Doug McMillon explained the company’s four dimensions of customer value during the conference. These are some of the core principles Walmart stands on as the company completes its fourth quarter.
“In all businesses, I suppose, and certainly retail, you only get what you deserve. And people are super practical, and if they can get a better deal somewhere else holistically, they’ll go get it. And so, what we think about is price, breadth of assortment, the experience they have shopping with us, whether it’s e-commerce or in stores, and trust. Those are the four dimensions of customer value for us. And when we gain share, it’s because the combination of those four things is winning,” McMillon explained.
Like any business, Walmart desires more growth and bigger sales in these trying economic times. However, the CEO emphasized that customer experience comes before profits. He went on to share that the company made a large investment in resetting pricing and maintaining price gaps lower than other retailers. McMillon also stressed that shopping at Walmart saves customers time, which is their most precious commodity.
“We’re a purpose-led company that wants to help people save money and live better. We really mean that, and that motivates us, and it’s been a challenge to go through the last few years with these higher costs, and we’re doing everything we can to try and get prices down, including having 6,000 rollbacks in the U.S. right now,” McMillon stressed.
A Walmart rollback is a temporary price reduction on select items. Rollbacks are a key part of Walmart’s pricing strategy and are used to attract customers and drive sales.
The CEO thanked employees for all their dedication to servicing Walmart’s customers via Instagram: “As we look ahead to the holidays, let’s keep up the good work and be there for our customers and members as they bring to life their family traditions, or even start new ones. Your hard work really does make a difference and I’m proud to work alongside you. Thank you.”
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