Walmart keeps Thanksgiving meal prices same as last year

Prices for a "typical Thanksgiving meal" will be the same as last year, Walmart CEO Doug McMillon said on a call with analysts Tuesday morning.

Why it matters: The largest retailer[1] in the world is trying to offset high inflation to attract a growing number of budget-conscious consumers.

  • "Customers that came to us less frequently in the past are now shopping with us more often, including higher income customers," McMillon said.
  • CFO John David Rainey also reiterated how much households earning over £100,000 are driving grocery sales -- nearly three quarters[2] of the company's gains in grocery market share are coming from this income group.

Between the lines: The company is tinkering with prices to balance demand with inventory.

  • And in the case of a pivotal holiday like Thanksgiving, it's cutting prices of products including whole turkeys to under £1 per pound (according to McMillon).

The big picture: Overall sales growth across Walmart stores in the U.S. reached 8.2% year-over-year[3] in the third quarter, compared to 6.5%[4] in the second quarter.

  • And while the company raised its annual revenue and profit outlook, executives were tempered in their optimism.
  • "We've seen incremental levels of inflation month over month be less significant, but it's not clear if this represents a sustainable trend," said Rainey.
  • "[And] despite a good start to Q4, our guidance assumes that the consumer could slow spending, especially in general merchandise categories."

Of note: Walmart also announced it's agreed to pay £3.1 billion[5] to settle several opioid-crisis lawsuits.

What to watch: Two back-to-back data points -- last week's consumer price index[6] and this morning's wholesale producer price index[7] report for October -- suggest inflation may be starting to ease.

  • Walmart's stock popped nearly 8% in pre-market trading and rose more than 7% intraday.

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References

  1. ^ largest retailer (nrf.com)
  2. ^ three quarters (www.axios.com)
  3. ^ 8.2% year-over-year (s201.q4cdn.com)
  4. ^ 6.5% (corporate.walmart.com)
  5. ^ £3.1 billion (www.axios.com)
  6. ^ consumer price index (www.axios.com)
  7. ^ producer price index (www.bls.gov)