Walmart is slashing prices on clothing and other products

Hypatia H E6fc7b54f64c3c36c6d712477c4520dc H 63080b7fbf8769cb0aa50588a90d8cb0
Customers outside a Walmart store in Torrance, California, US, on Sunday, May 15, 2022. Walmart Inc. is scheduled to release earnings figures on May 17. Photographer: Bing Guan/Bloomberg
Originally Published: 25 JUL 22 17:36 ET
Updated: 26 JUL 22 10:52 ET

(CNN) — Many shoppers have pulled back on buying clothing and other discretionary items as the highest inflation in four decades pinches their pocketbooks.

That’s left Walmart and other retailers stuck with too much clothing and bigger-ticket stuff sitting on their shelves. To help clear out the backlog, Walmart is cutting prices on some items and marking down products.

“The increasing levels of food and fuel inflation are affecting how customers spend,” Walmart CEO Doug McMillon said in a news release Monday. “Apparel in Walmart U.S. is requiring more markdown dollars.”

The company expects a slowdown on customer spending for 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 bring down prices in these areas.

While lower prices and markdowns are welcome news for shoppers, they mean lower profit for companies. Clothing and general merchandise are more profitable for Walmart than groceries and consumable items.

Walmart in its announcement Monday cut its profit outlook for the second quarter and the remainder of the year.

The company’s stock fell 8% during early trading Tuesday. Amazon, Target and other retailers’ stocks also dropped following the news from Walmart.

™ & © 2022 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.