Get All Access for $5/mo

Your Go-To Discount Retailer Is About to Get Even Cheaper Walmart announced it is lowering prices on many items including select clothing, electronics, and toys.

By Emily Rella

Opinions expressed by Entrepreneur contributors are their own.

Bloomberg | Getty Images

Although the prices of household items continue to skyrocket, Walmart announced on Monday that it would be reducing prices on select items, as well as reducing its profit outlook for Q2 as inflation continues to affect consumer behavior.

"The increasing levels of food and fuel inflation are affecting how customers spend, and while we've made good progress clearing hardline categories, apparel in Walmart U.S. is requiring more markdown dollars," Walmart CEO and President Doug McMillon said in a company release. "We're now anticipating more pressure on general merchandise in the back half; however, we're encouraged by the start we're seeing on school supplies in Walmart U.S."

Inflation-related price upticks on necessities like food and other household supplies have led many to de-prioritize nonessential items like clothing, the retailer said.

Walmart also cut back significantly on inventory during the quarter as prices are expected to be marked down in the general merchandise category, which includes items like clothing, electronics, and toys.

Though the price decreases are great news for consumers, they mean quite the opposite for the companies imposing them -- less money being spent by customers means less of a profit gain for the retailers.

Walmart explained that many customers have been coming to the store (known for its low prices) to "save money during this inflationary period" which can be reflected in the grocery gains reported by the retailer.

Still, Walmart remains hopeful that Q2 results will be profitable, as the company stated that it expects U.S. same-store sales to increase around 6% during Q2 of 2022.

Walmart follows in the footsteps of rival chain Target, which announced in June that it would begin storewide markdowns and inventory clearouts in an effort to keep its head above water amid inflation and supply chain issues.

Walmart was down around 8% in premarket trading on Tuesday.

Emily Rella

Senior News Writer

Emily Rella is a Senior News Writer at Entrepreneur.com. Previously, she was an editor at Verizon Media. Her coverage spans features, business, lifestyle, tech, entertainment, and lifestyle. She is a 2015 graduate of Boston College and a Ridgefield, CT native. Find her on Twitter at @EmilyKRella.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Side Hustle

'Hustling Every Day': These Friends Started a Side Hustle With $2,500 Each — It 'Snowballed' to Over $500,000 and Became a Multimillion-Dollar Brand

Paris Emily Nicholson and Saskia Teje Jenkins had a 2020 brainstorm session that led to a lucrative business.

Business News

'I'm Not Trying to Land on Mars': Mark Cuban Takes Dig at Elon Musk to Explain Why His Online Pharmacy Isn't Trying to Make More Money

Mark Cuban Cost Plus Drug Co. is an online pharmacy co-founded by Cuban and radiologist Alex Oshmyansky.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Business News

Meta Makes $1 Million Dollar Donation to Donald Trump's Inaugural Fund

Meta CEO Mark Zuckerberg also reportedly gave Trump a pair of Ray-Ban Meta smart glasses.

Business News

'It's Not About You': How to Fire Someone Effectively, According to Kevin O'Leary

O'Leary says that if you can't fire someone, you aren't the right leader for the organization.

Leadership

Should I Stay or Should I Go? 8 Key Points to Navigate the Founder's Dilemma

Here are eight key signs that help founders determine whether to persevere or let go.