Walmart Adapts To "Normalized" Hiring, But Consumer Caution Looms Large - CFO Says It "Made Us Sit Up In Our Chair"

Walmart Inc's WMT CEO Doug McMillon reportedly discussed changes in the company's hiring and employee retention. 

Doug noted that the hiring situation has become more "normalized" following the unique challenges posed by the pandemic, according to a news report by CNBC. 

McMillon explained that the previously tumultuous employment market has settled, allowing Walmart to staff its locations across the country effectively.  

The company, employing around 1.6 million people in the U.S., took a significant step this spring by raising its minimum wage for store employees to $14 an hour. This increase followed a previous minimum wage of $12 an hour.

Walmart's decision to raise wages came amidst similar moves by its competitors. 

Companies like Target Corporation TGT, Amazon.Com, Inc AMZN, and Best Buy Co., Inc. BBY had already set their own minimum wages at $15 an hour, reflecting a growing trend among major employers to offer higher baseline wages.

While the hiring situation has normalized, the retail giant anticipates predicting consumer behavior will become more challenging in the upcoming year due to economic pressures reportedly leading to increased caution in customer spending.

At the Morgan Stanley MS Global Consumer & Retail Conference, Walmart's Chief Financial Officer, John David Rainey, observed "anomalous type of behavior" in customers, which was concerning enough to "made us sit up in our chair" in terms of evaluating consumer health and their buying patterns, according to a news report by Reuters​​​​.

Discussing the spending patterns in the last two weeks of October, which diverged from previous months' trends, Rainey expressed that this was "puzzling" to them, emphasizing, however, that Walmart wasn't trying to cause any undue alarm with these observations, the report read. 

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Further addressing the situation at the conference, Rainey mentioned that the observed consumer behavior and the presence of deflationary pricing haven't prompted Walmart to alter its long-term strategy, Reuters said.

Previously, Walmart had observed that U.S. consumers were more conservative in their spending during the holiday season, as per the report.

However, the Thanksgiving weekend painted a different picture. Significant discounts on a wide range of items, including beauty products, toys, and electronics, successfully attracted consumers, easing the concerns of retailers who were anxious about reduced spending.

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Price Action: WMT shares are trading higher by 0.27% premarket to $153.89 on the last check Thursday.

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