As the cost of grocery and home furnishings rise, the major retailer will stick to its long-standing strategy of staying ahead of the competition, according to Walmart CEO Doug McMillon.
In an interview with CNBC’s “Squawk on the Street” on Tuesday, he said the company sees inflation as an opportunity to gain market share and underscores its commitment to value.
“This is our goal,” he said. “We save people money and help them live better lives. These words came from [Walmart founder] Sam Walton’s mouth. He loved to fight inflation. And so do we. “
This means Walmart is absorbing rather than shifting some of the higher costs associated with fuel, shipping, labor and more, even if it is affecting short-term profitability, he said. Its cost inflation is higher than its retail inflation.
He said the retailer strikes a balance between supplying shareholders and staying true to its roots as a discounter for customers.
“We are proud to try to keep prices low,” he said. “Our conversations with suppliers today, tomorrow will be on the topic“ How can you help us roll back prices, go upstream and be different from everyone else? “”
Inflation hit a 30-year high in September, according to the Commerce Department, as food, gas and other commodities began to rise in price. The persistence of these high prices surprised some economic leaders and government officials, including Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell.
Walmart, the nation’s largest private employer, beat analysts’ expectations for fiscal third-quarter earnings on Tuesday. One of the strengths of this three-month period was the grocery business. Grocery sales rose nearly 10% year over year as shoppers returned to stores and inflation at the company was low to moderate.
The company’s shares fell about 2% early Tuesday. Walmart shares lag behind the S&P 500. Its shares are up about 2% this year, compared to about 30% for the S&P.