Walmart shoppers are filling their gas tanks with less than 10 gallons for the first time since 2022, and its CFO calls it ‘an indication of stress’
Walmart Shoppers are feeling the pinch of higher prices at the pump, and that could be a sign of where the economy is headed.
Shoppers filled their gas tanks with an average of less than 10 gallons of gas for the first time since 2022, Walmart CFO John David Rainey said in the retailer’s latest quarterly earnings call this week.
“This is a sign of stress” in question during the call.
While high-income customers are doing well and have strong spending, the same cannot be said for lower-income consumers, he said.
“The lower-income consumer is more budget-conscious and perhaps coping with financial distress,” he added.
Rainey’s comments come as national average gas prices stood at $4.55 on Friday; This represents a whopping 42% increase from a year ago. Gas prices in all 50 states as of this week was over $4and in California it goes up to $6.
The war in Iran has disrupted global supply chains and nearly halted oil shipments through the Strait of Hormuz, where some 20 million barrels of oil flowed per day before the war. In total, Americans have spent $44.8 billion more than they normally would on gasoline and diesel since the war began in February; This works out to be around $190 extra per household. New York Times reportedCiting data from Brown University researchers.
These rising prices contributed to rising inflation, which stood at 3.8% in April, up 0.6% month-on-month, according to the latest Consumer Price Index. Consumer sentiment fell for the third straight month in May and is now at an all-time low, according to the University of Michigan’s monthly report. questionnaire.
High inflation triggered by skyrocketing gas prices has the potential to hurt customers’ wallets, Rainey added.
“I think it’s possible that if fuel prices continue at this level you’ll see upward pressure on average unit retail prices,” he said.
Walmart isn’t the only company sounding the alarm about consumers changing their buying habits due to economic pressure.
Earlier this year, costco CFO Gary Millerchip warned that the wholesale retailer is seeing inflation in items such as beef and confectionery, as well as a slight increase in non-food items. While he says this trend is not worrying so far, noted: “Members are very focused on quality and value.”
Dollar General’s latest earnings in March revealed that the company’s net income of $426 million was up 122% compared to the same period last year. That’s partly the result of a value-conscious consumer, CEO Todd Vasos said.
“I think the consumer really needs something. Dollar General At this point, we are looking ahead with everything that lies ahead for the consumer, including current macroeconomic pressures and geopolitical developments that we are all following very closely,” Vasos said. company earnings call.
This story first appeared on: Fortune.com
