Even Low-Cost Leader Wal-Mart Shows Signs of Inflation
Good old “Save money. Live better.” Wal-Mart may be choosing instead to surreptitiously raise prices, according to a JPMorgan Chase study. The company, well known by consumers for constantly lowering prices when possible, now appears to be moving in a different direction. In at least one Virginia store, Wal-Mart has recently increased its prices about six percent on average over a six-week period.
“A JPMorgan Chase (JPM) study of a Walmart Supercenter in Virginia found that the world’s largest retailer has raised prices by nearly 6% on average over the past six weeks, according to the New York Post. Reuters says it was the biggest sequential increase since JPMorgan started the study in January 2009.
“Some Prices Hiked Over 60%
“Some of the price hikes were considerably larger. For instance, the price of a 32-ounce bottle of Windex household cleaner jumped 50%, a 12-ounce box of Quaker Oats instant grits climbed 65% and a 50-ounce container of Tide detergent rose by more than 50%. A spokesperson for the Bentonville, Ark., company could not immediately be reached for comment.
“The results of the price-hike study aren’t entirely surprising. Shares of Wal-Mart, which rose at the height of the recent recession, are down more than 2% this year amid lackluster performance at its U.S. stores, where same-store sales fell 1.1% during the 13 weeks ended April 30.”
The ‘flations are fighting it out, inflation and deflation each jockeying for a say in the nation’s economy. In this Wal-Mart round, prices appear to be going up. It’s possible the behemoth company could be simply padding its margins as the article suggests. However, though it’s probably still too soon, another thought is that recent China factory strikes and subsequently rising labor costs could be nipping at even this giant’s heels.
You can read more details in DailyFinance’s coverage of Wal-Mart quietly raising prices.