Walmart has built its business on offering low prices, and CEO Doug McMillon has admitted that doing this has become challenging.
He has acknowledged that some factors are out of the company’s hands and that buying power can’t make up for tariff-driven price increases. McMillon has also made his customers a simple promise.
“With regards to our U.S. pricing decisions, given tariff-related cost pressures, we’re doing what we said we would do. We’re keeping our prices as low as we can for as long as we can,” he said during the chain’s second-quarter earnings call.
He credited that chain’s merchandise team for making it possible for Walmart WMT to hold, or even lower prices.
“Our merchants have been creative and acted with urgency to avoid what would have been additional pressure for our customers and members. They’ve done a terrific job managing pricing and mix across merchandise categories. They managed to generate rollbacks. They’ve made good quantity and flow decisions, and they’ve set us up well as we start the back half of the year.”
He did, however, note that flat or lower pricing was not a forever promise,
“As we replenish inventory at post tariff price levels, we’ve continued to see our costs increase each week, which we expect will continue into the third and fourth quarters,” he said.
Walmart’s boss sees spending changes
Many other retailers, and even McDonald’s, have reported seeing consumers change their spending habits. McMillon shared what he has observed.
“Not surprisingly, we see more adjustments in middle and lower-income households than we do with higher-income households. In discretionary categories where item prices have gone up, we see a corresponding moderation in units at the item level as customers switch to other items or in some cases, categories,” he said.
That’s very similar to what McDonald’s CEO Christopher J. Kempczinski shared during the chain’s second-quarter earnings call regarding U.S. consumer behavior.
“Certainly, overall QSR traffic in the U.S. remained challenging as visits across the industry by low-income consumers once again declined by double digits versus the prior year period. Reengaging the low-income consumer is critical as they typically visit our restaurants more frequently than middle- and high-income consumers,” he said.
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Walmart U.S. sales
- U.S. Net Sales (FY 2024): $441.8 billion, accounting for approximately 68% of Walmart’s global revenue.
- Global Revenue (FY 2025): $681 billion, a 5.07% increase from 2024.
- Q1 FY 2025 U.S. Retail Sales: $112.2 billion, up 3% year-over-year.
Source: Pulse
U.S. store network
- Total U.S. Retail Units (as of July 31, 2025): 5,206 locations, including Supercenters, discount stores, Neighborhood Markets, small formats, and Sam’s Clubs
- Walmart Supercenters: 3,560 locations
- Walmart Discount Stores: 354 locations
- Walmart Neighborhood Markets: 672 locations
- Small Formats: 20 locations
- Sam’s Club: 600 locations
Source: Walmart
Walmart, like McDonald’s, is lowering prices
McMillon made it clear that Walmart was trying to cut prices bases on the needs of its customers.
“Our rollback count in grocery was up 30% in the quarter compared to last year. Back-to-school is usually something of an indicator of how the holidays will go, and we feel good about how it went for us in terms of units and dollars sold and inventory sell-through at both Walmart and Sam’s Club. Our top back-to-school items had a lower price than last year, and we offered a basket of everything students need for their first day of school for under $65.”
Kempczinski, who emphasized earlier that winning back lower-income customers was key, shared his concerns.
“We remain cautious about the overall near-term health of the U.S. consumer. In this environment, we will continue to remain agile with respect to our value offerings to ensure the U.S. strengthens its leadership in value and affordability. Overall, we’ve made good progress with our value offerings,” he added.
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