Walmart is absorbing some price increases on products like food, rather than passing them along to consumers. The chain plans to continue keeping its prices down across the board to goose sales, executives told investors earlier today.
In announcing the company’s quarterly earnings, Bill Simon, head of Walmart’s U.S. division, said that the chain’s efforts to bring back more low-priced products and keep prices down helped get customers to spend more during visits to the store. But he added that economic conditions continue to make it hard for consumers to get by, and that the company is eating some price increases:
Rising food costs continue to be a major concern for customers. We hear from some shoppers that they believe it will be more difficult than ever to afford holiday meals for their families. … As others in the industry reported, customers continue to see food prices rise in key categories, such as produce, dairy and meat. Walmart continues to invest in absorbing some of these increases to ensure price leadership in our markets. During the quarter, grocery inflation was approximately 4 percent, in line with what’s been seen throughout the industry. But given our price investment, the impact to our customers was substantially less.
The company’s net sales during the third quarter were $109.5 billion, up 8.2% from last year, driven largely by international growth. In the U.S., sales in stores open at least a year were up 1.3%, the first increase in over two years.