A high inflation rate causes a gradual increase in product costs and handling services for retailers. Unless the population’s income rises in proportion to inflation, the demand for goods will decrease soon, reducing retail businesses’ revenue and inventory turnover. Walmart’s reputation as a low-price retailer continues to attract customers using strategies such as Walmart’s Everyday Low Price (Douglas Moran, 2022). However, the executives also suggested that Walmart will take the necessary measures to manage inflation if inflation continues to affect value-conscious consumers through increases in staple grocery prices. In particular, the president and CEO of Walmart, Doug McMillon, suggested that managing inflation will be easier in areas where the company makes most of its revenues: fresh food and dry grocery (Douglas Moran, 2022). Otherwise, if consumers become less price-conscious, the company plans to target further development of the digital shopping platform.
Considering the other inflation outcomes, Walmart company experienced significant changes in the number of employees. While it has been a long time since the COVID-19 pandemic started, retailers still experience negative consequences of the pandemic due to the spread of the COVID-19 virus mutations, such as the omicron variant. Thus, Walmart’s staffing numbers were lower because of the omicron variant’s spread. However, through February and March, workers started returning, and now, the employment situation has stabilized.
The employment issues caused by the pandemic and increased prices for goods handling forced the company to consider the option of automation for business processes. Automation can optimize handling costs and increase employees;’ productivity through more accurate management of inventory and improved processes of loading and unloading goods. The company now partners with tech startups to implement digital innovations in business automation.
Reference
Douglas Moran, C. (2022). Top Walmart executives talk inflation, labor and supply chain challenges. Retail Dive.