Walmart Profits from Rising Prices Pressuring Consumers
Bidenflation is not bad for everyone.
Walmart reported quarterly results on Thursday that blew past expectations. The company said it earned $1.84 per share, well above Wall Street’s expectations for $1.70 per share. Comparable sales—those from stores and digital channels operating at least 12 months—climbed 6.4 percent in the quarter that ended July 28. While that was slower than the growth seen earlier in the year, it was above the 4.1 percent growth expected by analysts.
In the conference call to discuss earnings, the company pointed to pressure inflation is putting on household budgets as contributing to its sales. Consumers are turning to Walmart for necessities because it offers lower prices.
“Jobs, wages and pockets of disinflation are helping our customers, but rising energy prices, resuming student-loan payments, higher borrowing costs and tightening lending standards, and a drawdown in excess savings mean that household budgets are still under pressure,” Walmart chief Doug McMillon said. “When you put all this together, we see families that are discerning about what they’re spending on — they are setting priorities and spending on the things they care most about.”
People are trading down from brand names to “private label” store brands, boosting Walmart’s bottom line.
“We see them buying more private-brand items, and they are buying more grocery staples and in-home meal options, consistent with eating at home,” McMillon said.
Somewhat ironically, given the strength of grocery sales, the company also said that its health and wellness sales were boosted by demand for weight-loss drugs.
Robert Reich Says It’s a ‘Goldilocks’ Economy
You know who else loves this economy? Joy Reid of MSNBC and former Clinton administration Labor Secretary Robert Reich. Here’s an exchange from Wednesday that aired on MSNBC.
“It seems to me that the more Republicans scream about drag queens and putting PragerU videos instead of real history in schools, it’s an indication to me they want to avoid talking about Bidenomics because Bidenomics is actually working. Is that how you read it?” Reid asked.
“I think that is exactly right, Joy. They are trying to deflect attention from the fact that the economy is great. It’s a Goldilocks economy. I’ll tell you, I’ve been watching and participating in economic policy for at least 30 years, and I don’t recall an economy that is this good,” Reich replied.
This is an extremely ironic talking point. The American left has pushed transgender ideology and critical race theory into schools and the broader culture. Now it is accusing the Republicans of focusing—sorry, screaming—on those things. In reality, the left is trying to divert attention to the alleged Republican focus on these issues because Americans are deeply unhappy with Bidenomics.
A new poll from the Associated Press-NORC Center for Public Affairs Research shows that only 36 percent of U.S. adults approve of Biden’s handling of the economy, below his already dismal 42 percent overall approval rating. Only around one-third of Americans describe the economy as “very good” or “somewhat good,” according to the poll.
So who exactly is deflecting here?
The Inflation Deception Act’s Birthday
Yesterday was the one-year anniversary of one of the most brazen lies of the Biden administration: the Inflation Reduction Act (IRA).
Inflation Reduction Act turning 1 is 'the anniversary of a lie': John Carney | https://t.co/OnJ9ORBu7L
— John Carney (@carney) August 17, 2023
We hesitate to say that the name of the legislation Biden pushed for and signed into law in August of 2022 is the most brazen lie of his administration simply because there have been too many deceptions to count, much less accurately rank.
You don’t have to take our word for it. Here’s the usually Biden-friendly Associated Press:
Even President Joe Biden has some regrets about the name of the Inflation Reduction Act: As the giant law turns 1 on Wednesday, it’s increasingly clear that immediately curbing prices wasn’t the point.
While price increases have cooled over the past year — the inflation rate has dropped from 9 percent to 3.2 percent — most economists say little to none of the drop came from the law.
“I can’t think of any mechanism by which it would have brought down inflation to date,” said Harvard University economist Jason Furman, who added that the law could eventually help to lower electricity bills.
Alex Arnon, an economic and budget analyst for the University of Pennsylvania’s Penn Wharton Budget Model, offers a similar assessment.
“We can say with pretty strong confidence that it was mostly other factors that have brought inflation down,” he said. “The IRA has just not been a significant factor.”
Yet on Wednesday, Biden was once again claiming that the IRA had reduced inflation.
“When the Inflation Reduction Act was passed a year ago today, inflation was — as pointed out by Chuck or Nancy; I can’t remember which one — 8.3 percent. It’s now down to 3.2 percent [applause] — the lowest amount — and it’s going to go lower,” Biden said.
We have also lost track of the times Biden told us that inflation was “going to go lower.” Judging by the acceleration of the U.S. economy in the third quarter, it’s very likely that will prove to be another of Biden’s inaccuracies.