Walmart Issues Urgent Notice in Us About Its Eggs and Other Foods

Consumers continue to feel the impact of high commodity prices, especially food. Doug McMillon, CEO of Walmart, expressed a few days ago that lower-income families are being the most affected.

For McMillon, the high prices are causing "frustration and pain" among shoppers, mainly in lower-income sectors. Although Walmart is seeing an increase in sales from higher-income shoppers, the situation is much more difficult for those with less purchasing power.

Inflation Driven by Eggs

One of the biggest culprits of this inflation is the rise in food prices, particularly eggs. According to the Consumer Price Index (CPI) in January 2024, inflation reached its highest level since August of the previous year. This was mainly due to the exorbitant prices of this product.

This price increase is largely due to the avian flu crisis, which has severely affected egg production, leading to a shortage in the markets. This situation has forced many families to adjust their budgets and change their shopping habits.

Additional Tariffs Threaten to Further Increase Costs

But inflation could worsen even more with the implementation of new tariffs. On March 4, tariffs will take effect that will affect imports from Mexico, Canada, and China. McMillon pointed out that these tariffs, which will increase product costs by 25% for Mexico and Canada and 20% for China, could exacerbate the situation.

"Consumers are already struggling with higher prices, and these tariffs could put even more pressure on them," McMillon commented. Additionally, this cost increase would also affect retailers, who will likely have to pass that increase on to consumers.

Walmart Sees Changes in Shopping Habits

Due to this inflation, shoppers are adapting their habits. McMillon explained that at Walmart, customers are choosing to buy smaller packages of products. The option of cheaper products or smaller portions seems to be a way to reduce spending.

As costs continue to rise, many consumers are making adjustments to keep buying what they need. The trend toward purchasing smaller quantities of products is a direct response to higher prices on the shelves.

What Does the Future Hold for Walmart?

The outlook for Walmart in 2025 is not as promising as it was in 2024. The company experienced a significant increase in sales. However, largely thanks to high-income shoppers, McMillon has already indicated that this growth could slow down next year.

Walmart's CFO, John David Rainey, anticipated in November that if the tariffs are implemented, prices could increase even more for consumers. Rainey assured that, although the company doesn't want to raise prices, they will be forced to do so on some occasions due to rising costs.

Fierce Competition and New Challenges

Despite the difficult economic situation, McMillon acknowledged the fierce competition Walmart faces, especially with giants like Amazon. In a Bloomberg podcast, the CEO highlighted that Walmart is learning from its competition. The company has hired experts from companies like Amazon and Google to improve its performance.

McMillon admitted that Walmart no longer leads the revenue sector, as Amazon has taken the lead. However, the CEO is confident that his company still has the ability to adapt to new challenges and compete effectively in the current market.