Walmart says inflation continues to impact its shoppers, particularly those with low incomes.
CFO John Rainey spoke about how consumers are trading meat for beans.
Inflation has hit lower-income consumers harder than their affluent counterparts.
Walmart shoppers are reaching for beans over lunch meats, the company said Tuesday, in the latest sign that inflation is hitting low-income consumers the hardest.
While Walmart's average customer is an educated suburban woman, the chain has also historically catered to lower-income shoppers. When inflation first began to spike, the company even saw a boost in sales, owing to its penchant for steep discounts. But as prices continued to skyrocket, Walmart began to deal with its own customers erasing items from their shopping lists or swapping certain purchases for cheaper substitutes.
"Instead of buying maybe deli meats or beef, they're trading down to things like canned tuna, chicken and, even, beans," Walmart CFO John Rainey told investors. "We're seeing the same thing in the quantity, where they're trading down for smaller pack sizes that are more affordable. So instead of buying 12 items to buy six items in a pack."
Rainey said the big box giant's shoppers are also generally buying fewer items and foregoing general merchandise for cheap food options like Walmart's private label offerings.
In June, the inflation rate hit 9.1%, a 40-year-high. Since then, prices have begun to cool down somewhat. In July, prices only rose 8.5% year over year, marking an end of the trend of month-over-month spikes. Still, ongoing inflation has made many Americans feel substantially poorer whenever they hit the grocery store or the gas pump.
Fuel proved to be an increasingly-expensive necessity over the summer. Staples like eggs, beef, and pork have also seen surging costs. In June, the price of beef jumped 4.5%% month-to-month, while eggs increased 3% and pork leaped 3.1%.
But these high prices aren't borne equally by everyone. Rising prices have especially harmed low-income to middle-class individuals, as opposed to their wealthy counterparts. Thousands of citizens fell below the poverty line in 2020, and experts have expressed concern that ongoing inflation could make matters worse by sparking a recession.
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