During the Morgan Stanley Global Consumer and Retail Conference on Dec. 3, Walmart CEO Doug McMillon addressed inflation challenges, preparations for potential policy shifts, and insights into consumer behavior.
His remarks highlighted Walmart’s strategic focus on cost reductions, adapting to external changes, and maintaining its commitment to customers across all income levels.
Walmart Takes Aim at Rising Food Inflation
McMillon expressed disappointment over the resurgence of food inflation, driven by factors like dairy, eggs, cocoa, and other essential inputs. He emphasized Walmart’s ongoing efforts to counteract these price pressures through supplier partnerships and price rollbacks.
“Food prices remain significantly higher than pre-pandemic levels, which isn’t what customers want or what we want,” McMillon said. “We’re working with suppliers to bring prices down and offering rollbacks to help ease the burden on families.”
While fresh food categories like eggs and milk are expected to adjust faster, Walmart’s CEO cautioned that processed food prices may remain elevated throughout 2025. However, McMillon noted relief in general merchandise pricing, where prices have decreased by 4% compared to last year.
“Customers are finally seeing some relief in general merchandise,” McMillon added. “On the food side, we’re optimistic about gradual improvements but cautious about sustained pressures on processed goods.”
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Preparing for Policy Changes
McMillon also addressed uncertainties surrounding potential policy changes under the incoming Trump administration, emphasizing Walmart’s adaptability in uncertain regulatory environments. Walmart has developed systems to navigate policy shifts effectively, a skill honed during the pandemic.
“We’ve learned to react fast and stay empathetic toward our customers and associates,” McMillon said. “Our adaptability remains a key strength as we navigate an unpredictable environment.”
McMillon reiterated Walmart’s focus on maintaining trust and delivering value, even amid volatile economic and political conditions.
Walmart Observes Consumer Resilience
Discussing consumer trends, McMillon highlighted the resilience of Walmart’s diverse customer base. He noted continued stress among lower-income shoppers but observed strong engagement from higher-income customers drawn by Walmart’s convenience and expanded online assortment.
“Our ability to serve all income levels effectively keeps us confident, no matter how price-sensitive consumers may become,” McMillon said.
He also reflected on the company’s broader purpose of helping customers save money and live better, a mission that has driven Walmart’s actions during challenging economic periods.
Scaling Omni-Channel Growth
Looking ahead, McMillon outlined Walmart’s long-term growth strategy, including expanding its marketplace, leveraging data, and investing in supply chain automation. He noted that these initiatives will enhance the company’s efficiency and drive profit growth faster than sales over the next five years.
“Walmart is leveraging technology to enhance affordability and convenience,” McMillon said. “Our omni-channel strategy positions us to meet the evolving needs of our customers.”