Walmart's Chief Executive Officer Expresses Belief That Food Prices Could Soon Decrease
When Walmart's CEO expresses the belief that food prices might decrease, it could indicate a few scenarios. This anticipation might stem from factors such as improved supply chain efficiencies, increased competition among suppliers, or changes in consumer demand impacting market prices
In preparation for the upcoming holidays, Walmart is preparing itself. As the season approaches, the store is getting ready for the festivities.
In New York, CNN reported...
Shoppers may soon have access to lower grocery prices.
Doug McMillon, the CEO of Walmart, declared on Thursday that the US food industry might be going into a period of deflation following the last three years of costly price rises that have caused shoppers to be stunned when they go to the supermarket. Prices have climbed 25% since the pandemic began.
McMillon has suggested that dry groceries and consumables may become cheaper in the near future. He noted that Walmart, the largest U.S. retailer, could enter a period of deflation due to the fact that grocery items constitute more than half of its total sales.
The rate of increase in food costs has dropped off in recent weeks, however, the prices of food items have generally been increasing.
Target Corporation recently reported its fiscal year 2020 earnings, and investors responded positively. The retail giant revealed that its profits were higher than expected, with a 3.8% increase in sales. This news caused Target's stock prices to soar, with a 13% gain in the past month. Investors are now eagerly awaiting the company's outlook for the new year.
A cautionary message has been issued by Target regarding the upcoming festivities. According to a report from CNN, the retail giant has warned investors to be wary of the upcoming holiday season.
The Labor Department reported that food prices increased by 3.3% year-over-year in October. Interestingly, certain items like bacon, eggs, and seafood have seen decreased prices.
The Labor Department has reported that the costs of household appliances, cellular devices, flights, and playthings have all decreased.
Shoppers would be thrilled if deflation occurred, as it would result in cheaper prices. However, it could be a potential hazard to the economy.
Declining prices can be a sign of feeble demand, with consumer expenditure forming a substantial part of the economic landscape.
By holding off on spending, individuals can contribute to a downturn in the economy. When there is a collective belief that prices will decrease, people will restrain from buying things. This can lead to layoffs for employees and a recession.
When a nation's economy enters a deflationary period, it is much more difficult for a central bank to get it to expand again, as opposed to if it were in an inflationary period. Consequently, the Federal Reserve has increased interest rates in order to rein in the economy.
In Japan, a period of time of economic decline between 1991 to 2001 was famously known as "the lost decade". In order to stimulate the economy and reintroduce inflation, it took many years of implementing various measures.
This article was supported by Elisabeth Buchwald of CNN.
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https://edition.cnn.com/2023/11/16/economy/grocery-prices-deflation-walmart/index.html
