Walmart CEO Doug McMillon says inflation is opportunity to beat competitors on price

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  • Walmart CEO Doug McMillan said the big-box retailer will lean into its long-term strategy of undercutting rivals on prices, even as costs increase.
  • On CNBC’s “Squawk on the Street,” he said the company sees inflation as an opportunity to gain market share and emphasize its commitment to value.
  • “We are proud to try to keep prices down,” he said. “Today, tomorrow our conversations with suppliers will be ‘How can you help us take prices back and float to the top and stand out from everyone else?

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As the cost of groceries and household items rises, Walmart CEO Doug McMillan said the big-box retailer will lean into its longstanding strategy: undercut rivals on price.

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In an interview with CNBC’s “Squawk on the Street” on Tuesday, he said the company sees inflation as an opportunity to gain market share and emphasize its commitment to value.

“That is our aim,” he said. “We save people money and help them live a better life. These are the words that came from [Walmart founder] Sam Walton’s mouth. He loved to fight inflation. so do we.”

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That means Walmart is absorbing rather than passing on some of the higher costs that come from fuel, shipping, labor and more — even if it weighs on short-term profitability, he said. Its cost inflation is higher than its retail inflation.

He said the retailer is striking a balance of delivering for shareholders and staying true to its discount roots for customers.

“We are proud to try to keep prices down,” he said. “Today, tomorrow our conversations with suppliers will be ‘How can you help us take prices back and float to the top and stand out from everyone else?

Walmart, the nation’s largest private employer, on Tuesday topped analysts’ expectations for fiscal third-quarter earnings. One of its strengths was its grocery business in a span of three months. Grocery sales rose about 10% year over year, as customers returned to stores and the company saw low to mid single-digit inflation.

Shares of the company were down about 1% early Tuesday. Walmart stock has lagged behind the S&P 500. Its shares are up about 2% versus about 30% for the S&P this year.

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