Odd, Inflation is Driving Prices DOWN at Iowa Walmarts?
It's an odd concept, inflation driving the cost of goods down. It seems counterintuitive to even think prices on much of anything could go down as inflation rises. But, that's exactly what's happening with Walmart.
The reason why inflation is leading to lower prices on certain items is actually pretty simple: customers are making fewer purchases.
According to a KTIV report, Walmart has a large buildup of inventory and as food and fuel prices have increased, consumers have cut back on purchasing certain items, leading to the extra inventory.
So what can you expect to save on if you drop by an Eastern Iowa Walmart? The KTIV report says clothing and "big ticket items". I'd assume this would be electronics like TVs or possibly older-model cell phones/tablets. Again, that's a guess.
While rollbacks and falling prices may seem nice, this is actually not such a great thing, according to CNBC. They see Americans needing to spend cash on everyday essentials, and not clothing and frills as a sign the US economy is in trouble.
As today's announcement hurt Walmarts stock sending it down about 8%. But, they're far from being the only retailer to be feeling the spending slowdown.
The same CNBC story indicates Kohl’s, Gap, Bath & Body Works, and Bed Bath & Beyond have all said they expect lower profits. Amazon's stock is down today indicating the online retail giant is also experiencing or at least is expecting to see fewer purchases on many items in the near future.
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