Walmart Faces Inflation Woes, But Consumers Could Find a Silver Lining
The coronavirus pandemic has disrupted the lives of individuals and businesses worldwide. To make matters worse, an outbreak at a manufacturing plant or a seaport snarls the supply chain. The supply shortages have been met with rising consumer demand. Typically, when supply falls and demand grows, prices increase, causing inflation. This time has been no different with consumers in many parts of the world seeing uncomfortable inflation.
Walmart (NYSE: WMT), the world's largest retailer, is experiencing these macroeconomic headwinds firsthand. Inflation is biting into profits. Meanwhile, to counter supply shortages, Walmart ordered more inventory than needed, thinking it was better to overshoot than to have empty shelves. That could challenge the retailer as consumers focus their spending on experiences more than items amid economic reopening.
WMT Inventories (Quarterly) data by YCharts
Source Fool.com
