The death of the bargain! Struggling Retailers No Longer Offering Competitive Deals, Ex-Walmart CEO Says — As Amazon Prime Sales Take Off
Retail bargains are becoming less generous – and that’s causing shoppers to stop spending, Walmart’s former CEO claims.
Bill Simon, who was in charge of the retail giant between 2010 and 2014, said consumers were facing a perfect storm of inflation, rising interest rates, the return of student loan repayments – and global tensions due to the conflict in Israel.
It means ‘for the first time in a long time there is a reason for the consumer to pause’, he added.
Amazon kicked off its two-day Prime sale on Tuesday — prompting Walmart and Target to generate their own sales opportunities to compete.
But Simon said bargains this year aren’t nearly as deep. He told CNBC: ‘They usually say 50-inch TV is $199 or something like that. And now they say 50-inch TV is 40 percent off.
Bill Simon, who was in charge of Walmart between 2010 and 2014, said that discounts are becoming harder for shoppers to find
‘You use percentages when you’re not really proud of your price point. I think you have inflation pushing up the relative price points, so even the retailers are feeling the inflationary pressure.’
Shares of Amazon, Walmart and Target have all been under pressure over the past two months. Target fared the worst of all three with shares trading 28 percent lower than last year on Tuesday afternoon.
Simon, who now sits on the boards of Darden Restaurants and Hanes Brands, predicts Walmart will outperform its competitors “just because of the food business.”
“They’re going to have both the eyeballs and the food traffic to probably have a better Christmas than maybe their competitors,” he said CNBC.
His comments come after Walmart’s current CEO said food sales at the chain are being dampened by the rising number of Americans using weight-loss drugs like Ozempic.
Simon, who now sits on the boards of Darden Restaurants and Hanes Brands, predicts Walmart will outperform its competitors ‘just because of the food business’
US inflation accelerated for a second straight month to an annual rate of 3.7 percent – from 3.2 percent in August
In an interview with Bloomberg last week, John Furner said anonymous data analyzes how such appetite suppressants affect spending.
‘We are definitely seeing a slight change compared to the total population; we do see a slight pullback in overall basket,’ he added. “Just fewer units, slightly fewer calories.”
Despite this, sales in the store and on Walmart’s digital channels rose 6.4 percent in the last quarter.
The retail giant also saw its international net sales rise to $27 billion as food traffic increased 2.8 percent at its more than 10,500 locations.
Despite greater economic uncertainty, consumer spending remained strong, boosted in part by a strong labor market.
The current US inflation rate is hovering at 3.7 percent – well above the Federal Reserve’s two percent target.