Deflation coming to stores near you

A new economic term to learn this week is ‘deflation,’ as Walmart CEO Doug McMillon says low grocery prices are on the way to delight American consumers this Thanksgiving. He suspects reduced prices to stay for longer.

In an earnings call Thursday, McMillon said Walmart is seeing a drop in the prices of groceries like eggs, dairy, chicken and seafood. He also added that the store and economy, in general, will experience deflation for dry groceries and consumables.

Inflation had caused a 24% rise in food prices post-pandemic, and only in January began to slow down. There has been a 2% price increase in groceries so far this year.

While customers welcome low grocery prices, economists warn a prolonged severe deflation could push down production, demand, and employee wages in stores. With the sky-high federal interest rates, stores may accumulate debt if revenue is low.

Recently, heads of stores like JCPenny and Target also indicated price reductions in their goods.