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Walmart CEO Doug McMillon yesterday told CNBC that his company has a growing theft problem.
Mr. McMillon said that theft has reached levels that are “higher than what’s historically been” the case for the retailer. “If that’s not corrected over time, prices will be higher, and/or stores will close,” he said.
Walmart’s CEO said the company has put safety and security measures in place to address theft. He said that “local law enforcement being staffed and being a good partner” is part of the response needed to curtail the frequency with which goods are illegally walked out of stores.
In response to a question about laws that make it more difficult to prosecute shoplifters, Mr. McMillon said that laws and practices vary by location and that the retailer would benefit from greater “policy consistency and clarity” so that it would be able to make capital investments where they make the most sense in thwarting thieves.
Walmart’s McMillon also offered a nuanced explanation of how inflation is affecting consumers in the CNBC interview.
“It’s probably helpful to break that [inflation] down into different categories. Fresh food is more volatile, it fluctuates more, so today’s beef prices are down and chicken prices are still high. Produce prices are relatively low relative to what they were before,” he said. “Dry grocery, processed foods and consumables are where the inflation is most stubborn. Double digit inflation rates have been around for a while and it looks to us like they’re going to be with us for a while. So that’s a primary area of focus for us — trying to come up with creative ways with our suppliers to get prices down. Customers choose private brands in those environments more often.”
Inflation, he said, was less of a problem in general merchandise categories such as apparel, sporting goods and toys where “prices have come down more aggressively.” Mr. McMillon said.
“We’re still inflated but we’re not inflated nearly as much as we are in the other categories,” he said. “So when you think about what’s happening, families are choosing when they buy their big basket of things that they need all the time to look for value. Many of them are coming to us for those big food and consumables baskets, and then they’re being selective on general merchandise.”