THE WHAT? Walmart shares have slid 10 percent as the retailer slashed its profit forecast due to rising prices for food and fuel forcing consumers to cut back on discretionary purchases, according to Reuters.
THE DETAILS The retailer has predicated that its full-year profit would fall 11-13 percent, as opposed to the 1 percent previously forecast.
Walmart has said it will cut prices of clothing and general merchandise more aggressively to reduce a spring backlog.
THE WHY? Walmart’s warning also sent shares in rivals Amazon and Target tumbling, with Burt Flickinger, Managing Director at Strategic Resource Group signalling a ‘proverbial train wreck’ for retailers.
Doug McMillon, Walmart’s Chief Executive, said in a statement, “The increasing levels of food and fuel inflation are affecting how customers spend. … We’re now anticipating more pressure on general merchandise in the back half.”