that remains walmart (WMT) and other retailers were left with too many clothes and more expensive things on their shelves. To help eliminate the backlog, Walmart is cutting prices on some items and marking down products. “Rising levels of food and fuel inflation are affecting how customers spend,” Walmart CEO Doug McMillon said in a Monday news release. “Clothing at Walmart US requires more discount dollars.”
The company expects a slowdown in customer spending on general merchandise in the second half of the year, McMillon said.
Walmart is the largest retailer in the United States and its move could prompt rivals to lower prices in these areas.
While lower prices and rebates are good news for shoppers, they mean lower profits for businesses. Clothing and general merchandise are more profitable for Walmart than groceries and consumer goods.
Walmart in its announcement on Monday cut its earnings outlook for the second quarter and the rest of the year.
Shares of the company fell 8% during early trading on Tuesday. Amazon (AMZN), Goal (TGT) and shares of other retailers also fell on the Walmart news.
Source: www.cnn.com