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Walmart CEO Points to High Fuel Prices as ‘Stress Point’
John Furner Says Low-Income Consumers Feel Greater Pressure
Key Takeaways:
- Walmart CEO John Furner said June 3 that high gasoline prices are straining U.S. households, especially low-income consumers, during the company’s shareholder week in Arkansas.
- He said fuel costs are a key pressure point as consumer sentiment weakens, while Walmart has held price increases to about 1% and gained market share across incomes.
- Executives warned that if fuel prices stay elevated, product prices may rise in coming months as Walmart has largely absorbed cost increases to remain competitive.
Walmart Inc. CEO John Furner said that high gas prices are straining U.S. households, and low-income consumers are experiencing greater pressure.
“That’s really the stress point, is the price of fuel,” Furner told reporters June 3 during the retailer’s annual shareholders’ week in Bentonville, Ark. “Hopefully we see some relief on energy prices,” he added.
Higher-income consumers continue to spend at Walmart, buying more items and shopping more frequently, Furner said. The price of goods sold at Walmart have risen about 1%, below the rate of headline inflation in the U.S., Furner said during a question-and-answer session with reporters.
The company, which is viewed as an economic barometer due to its large size and reach, has gained market share across income groups by focusing on low prices, fast delivery and a wide assortment of goods.
Walmart posted solid earnings in its latest quarter but cautioned that higher fuel costs have weighed on its profit. While it has absorbed most of the increases in order to offer competitive prices, products could get more expensive in the coming months if gas prices stay at current levels, executives said.
U.S. consumer sentiment has slipped as conflict in the Middle East continues to roil energy markets, reigniting concerns about inflation. That has sparked a renewed hunt for value among households, while drivers are buying less gasoline when filling up their cars.
Furner, who took over as CEO in February, is hosting media and investors for Walmart’s shareholder week, a decades-old tradition that combines voting on proxy proposals with activities for thousands of Walmart employees who travel from around the world.
Walmart ranks No. 1 on the Transport Topics Top 100 list of the largest private carriers in North America and No. 32 on the TT Top 50 global freight companies list.
