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By now, the trend should be clear. Buyers are fed up with price increases, and retailers are reluctantly responding.
From department store giants to specialized retailers to fast-food chains, companies are slashing prices in an attempt to court inflation-weary shoppers and shore up some rough quarterly performances.
Executives at Advance Auto Parts said during a recent earnings call that the company adjusted prices on 8,500 items in the first quarter, which will have a $40 million annual impact on the company’s bottom line.
“In instances where our pricing just simply doesn’t make sense relative to the market, we made some surgical moves to make sure our pricing reflected what the market is, so that we’re viewed as a legitimate source from where customers will buy,” Shane O’Kelly, CEO of Advance, told analysts.
Ryan Grimsland, Advance’s CFO, noted that “Q1 was challenging” for the company, which reported a 0.3% YoY decrease in net sales. The issue, O’Kelly said, was in part due to weather, but also because of the “challenged consumer who is experiencing diminished purchasing power, higher credit card debt, and uncertainty about the balance of the year in terms of macro conditions.”
Advance is the latest retailer to cut prices. Target recently said it would reduce prices on up to 5,000 commonly purchased items, CFO Brew previously reported. The department store chain posted a year over year sales decline in Q1, a result of “continued soft trends in discretionary categories,” CEO Brian Cornell noted in a recent earnings call.
Walgreens also recently announced it was cutting prices on 1,300+ items, including personal care products, vitamins, and snacks. “Walgreens understands our customers are under financial strain and struggle to purchase everyday essentials,” Tracey Brown, president of Walgreens Retail and chief customer officer, said in a news release.
Walmart also revealed on its most recent earnings call that it had cut prices on thousands of items.
“What is also helping us is on our food categories. Well, broadly, across the store, we have almost 7,000 rollbacks,” Walmart CEO John Furner said during the call. “That’s really helping that in our food categories, we see an even larger spread between eating at home, preparing meals at home, and eating out, which we think can help Walmart over the remainder of the year.”