Deep changes in big retail, including price hikes and store closures, are coming, per a warning by Walmart’s CEO.
Changes Coming Due to Advanced Technology, Economic Uncertainty
The latest warning of a “lot of changes coming” by Walmart’s chief executive Doug McMillon comes several weeks after he cautioned that potential store closures might be in the making.
At the same time, the retail giant may further hike its consumer product prices.
McMillon’s new warning, however, made it clear that simmering economic uncertainty and a potential economic downturn could catalyze far-reaching technological changes toward greater automation of various retail-related processes.
This may change big retail for good. In an interview, the Walmart CEO told CNBC News that new technologies were already getting implemented toward greater automation of delivery and supply chains.
McMillion praised the new opportunities that technology offers in fields such as big data, more intelligent algorithms, and supply chain automation.
In his words, these will bring about “a lot of changes” in retail fields ranging from delivery and “last mile” with electric vehicles to distribution and fulfillment centers. The top executive of Walmart said inflation had put tremendous pressure on the retail business.
However, he noted his company developed a plan to tackle inflation’s effects, including by adapting its inventory in preparation for 2023, whose first half may or may not see the onset of a significant recession.
McMillion added in the fresh food categories, there had been positive changes with respect to inflation. Yet, dry groceries and consumables remain the items with the “most stubborn and persistent” price increases.
When clothing, toys and sporting equipment aren't selling, that should tell you that we're in a RECESSION https://t.co/kmIcZm7Kg0
— TYPE O NEGATIVE (@Avatar_Country2) December 22, 2022
— unusual_whales (@unusual_whales) December 18, 2022
Retail Theft Skyrockets as Organized Crime Groups Target Stores
In another interview in early December, the Walmart CEO warned theft in the company stores reached a “historical high” and this could lead to both price hikes and store closures.
Fearful that shoplifting could have negative consequences for consumers because of shuttered venues and higher prices, he criticized prosecutors over their approach to handling the issue.
An estimate reported by Reuters said Walmart loses about $3 million per year because of theft.
The CEO of another major retailer, Target, Brian Cornell, has also complained of growing theft, but especially of “organized retail crime,” which then sells the stolen goods on the black market.
A report by The Sun cited a warning by Ralph Manginello, a criminal defense attorney, who said those caught stealing in Walmart stores in Texas could lead to criminal charges.
It noted many of the retail theft cases involve people at self-checkout counters who don’t pay for all items in their shopping carts.
In one case, a Walmart store in Whitehaven, Memphis, last month, was targeted by 22 organized crime suspects who stole products simultaneously. Some in the organized crime group were armed and fled the store in about 20 vehicles without any shots fired.
The facts say he's lying.
Walmart CEO on rise in retail theft: Prices could go higher and stores will close https://t.co/hVxxYtN30i
— Tom Williams (@tommyboy0690) December 14, 2022
— FOX 2 Detroit (@FOX2News) December 22, 2022
🧵 Walmart CEO, Doug McMillon blames the supply chain, and trucking on what he calls ‘stubborn and persistent’ inflation. Here’s why I call bullshit. Walmart has a near grocery monopoly here in El Paso. I purchased 2 poblano peppers for the grand total of…wait for it…$4.74. pic.twitter.com/QhB313epXb
— Ty Ross @email@example.com (@cooltxchick) December 18, 2022