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Speaking at the 2023 Goldman Sachs Global Consumer Conference, McMillon stated: “We feel well-positioned, with brick and mortar, with stores and clubs, with curbside pickup and with various forms of delivery.”
As a result, the retailer expects to be able to continue to drive growth.
Focusing on the state of the consumer, the WMT CEO told listeners that they see commonality across the various countries they operate in, with the consumer environment in the US better than he would have expected it to be at the start of the year.
McMillon was “concerned about the amount of inflation” in certain categories and how it would impact discretionary purchases. However, “things have held up better” than the Walmart CEO would have guessed, and the employment situation, wage increases, and some pockets of disinflation are helping the company feel “pretty good about where the consumer is in the US.”
Even so, Walmart does “see some behavioral change from some customers that are particularly pressured from a budget point of view,” pointing to pack size changes and moves to private brand.
Focusing on pricing, McMillon believes customers “are going to feel some relief” over the next few months as “general merchandise prices are coming down.” Food and consumables has gone up, and Walmart expects that to continue through the year, but the company’s previous forecasts were worse than what is happening.
Answering questions on next year, McMillon stated that they see consumers facing about the same amount of headwinds in 2024 as they do currently, with consumer behavior being similar to today.
Even so, he sees prices being slightly lower in 2024 compared to 2023, which is in part being helped by supplier cost structures changing as more and more want unit volume now.
“As suppliers take their costs down, we will try to quickly pass that on to customers and members,” said McMillon. “I think the suppliers are going to be able to do that, and I think their cost structures are changing. Many of them are wanting unit volume now, and that’s going to help us drive demand.”
