Walmart CEO Doug McMillon does not know which way consumers will go with their spending next year.
McMillion was on CNBC’s “Squawk on the Street” recently and said shoppers are facing more credit card debt and less in their bank accounts than ever before, which makes 2024 extremely difficult to predict.
Walmart delivered solid results during the third quarter, but there was a stretch in late October that made leadership feel uneasy.
During the earnings call, McMillon also said grocery prices were on the decline in areas like dairy, chicken, and seafood, a trend which will put more unit pressure on Walmart moving forward.
Walmart has been able to rely on strong sales in grocery while consumers shy away from non-essential items, but McMillon believes the U.S. may soon experience a period of deflation.
The retailer is expecting U.S. same store sales to peak next quarter before it starts to drop over the next three quarters. Walmart also adjusted its full year forecast to be lower than expected.
Walmart CFO John David Rainey told CNBC that consumers are putting more stock into major promotions as they continue to watch their budget, as the retailer has experienced a decline in purchases before and after a sales event.
Walmart CEO Doug McMillon says 2024 could be a difficult year for retailers as shopping behaviors could turn unpredictable. Walmart is forecast sales gains for the first quarter, but drops for the remaining three. It's the perfect storm, rising credit debt and dwindling savings for shoppers, and lower unit prices at the retail level. How early do you see sales beginning to struggle?
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