The Real ‘Inflation’ Effect
Commentary
If you’re the CEO of the world’s largest retailer, you’re not off to a great start if you are highlighting sales of men’s flannel. Yet, such was the case for Walmart’s chief executive, Doug McMillan. Consumers are behaving differently than they had last year, even when compared to earlier this year, and this poses serious challenges.
It wasn’t really men’s flannel that McMillan specifically noted during his appearance on CNBC on Aug. 16. What apparently sold really well during the company’s prior quarter, besides back-to-school basics, was low-priced men’s flannel.
No one is immune from this year’s decidedly not-booming macroeconomic climate. Where last year Consumer Price Index (CPI) rates were confused for the underlying pace of the economy, this year we more easily see the distinction. As McMillan put it, “People are really price-focused now, regardless of income level. And the longer this lasts, the more that’s going to be the case.”…