Pharmacy retail chain Walgreens is reducing prices on over a thousand items amid high inflation, joining other outlets like Target and Aldi which have taken similar measures.
The company announced lower prices on more than 1,300 products and is offering promotions to “help customers save” money. The lower prices are applicable to a wide range of national and store brand products, from health and wellness to personal care and seasonal categories, including facial cleansers, hand creams, mini pretzels, pain relief medications, and potato chips.
“Walgreens understands our customers are under financial strain and struggle to purchase everyday essentials. We continue to be committed to our customers by lowering prices on over a thousand additional items, something we’ve been doing since October of 2023,” said Tracey D. Brown, president of retail products and chief customer officer.
The company’s second-quarter 2024 results published in late March showed the retailer’s sales rising to $37.05 billion from $34.86 billion in 2023. The company suffered a net loss of $5.9 billion in the second quarter of this year compared to a net profit of $703 million during the same period last year, which it attributed to its investment in primary care clinic chain VillageMD.
The retailer lowered its 2024 adjusted earnings per share guidance, from $3.35 to $3.20, due to the “challenging retail environment” in the country.
Walgreens joins a list of retailers that have dropped prices amid high inflation. Target said this month that it would reduce prices on 5,000 frequently bought items, including diapers, coffee, and milk.
The decision came as company sales declined for the fourth straight quarter in first quarter 2024, ending on March 31. During an earnings call, Target chairman and CEO Brian Cornell admitted that inflation continued to put a strain on customers.
The “cumulative impact of higher prices on consumer prices” was causing a softening in demand among discretionary categories, he noted.
“Even as inflation moderates and we see sequential improvement in discretionary category trends, higher interest rates, uncertainty around the future of the economy, continued social and political divisiveness, and the upcoming election cycles have consumers concerned about what lies ahead.”
Grocery store chain Aldi announced earlier this month that it was dropping prices on over 250 items, aiming to pass along $100 million in savings to customers through Labor Day. The decision was taken as “shoppers continue to feel sticker shock at the checkout amid stubborn inflation.”
Walmart recently pointed out it was seeing major growth in higher-income customers, highlighting how inflation is affecting people from this segment. The company defines high-income customers as individuals making $100,000 per year or more.
Walmart CEO Doug McMillon said the firm was not trying to chase higher-income customers. It is that “we just offer value.”
Historically, people with higher incomes have shopped at the company’s stores, he noted. Such groups have usually been selective in the categories they buy.
“So, if we offer them the right items at the right prices, whether that’s in store, first party, or marketplace, they’ll respond to that. And so, as we’ve been able to expand our assortment online, we can appeal to more people.”
Burdened by inflation
Under the Biden administration, prices have surged by almost 20 percent. Susan Garland, 47, from Elkridge, Maryland, sees inflation as a key issue facing the United States.
For more than 10 years, her family’s grocery bills used to be roughly $70 per week. Inflation bumped it up higher.
“We are definitely feeling it. We’re a two-person family. Our grocery bill is now over $100 a week,” she told The Epoch Times. Ms. Garland had to cut down on eating out and vacations.
A May 9 Adobe Analytics report showed that shoppers were embracing cheaper goods online after facing “months of persistent inflation.”
The share of cheaper goods rose by 96 percent when it came to consumer spending on personal care. It jumped 64 percent for electronics, 47 percent for apparel, 42 percent for home/garden, and 33 percent for groceries.
“Within a category like groceries, the data showed that goods with low inflation saw revenue grow by 13.4 percent, while products with high inflation saw revenue drop by 15.6 percent.”
President Joe Biden defended his policies on inflation in a May 15 statement, claiming that fighting inflation and lowering costs was his “top economic priority.”
He vowed to build two million new homes to lower housing costs and take on Big Pharma to bring down prescription costs. The president called on grocery chains making “record profits” to lower their prices.
Surging inflation had forced the U.S. Federal Reserve to push up interest rates in a bid to counter rising prices. This has made things more complicated for citizens as borrowing costs rose, making lives much tougher for people who take on debt like credit cards and loans.
The Fed was expected to start cutting rates this year. During a recent panel discussion, Fed Chair Jerome Powell cautioned that rate cuts may not come as soon as expected due to persistent inflation.
“Recent data have clearly not given us greater confidence,” he said. “If higher inflation does persist, we can maintain the current level of [interest rates] for as long as needed.”
In a semiannual report on financial stability, the Fed warned that if interest rates remain higher for a longer period, it could end up straining the ability of households and businesses to service their debts, thus weakening the economic outlook.
“Financial intermediaries, including lenders with high exposures to CRE [commercial real estate] and consumer loans, could encounter greater losses as a result of higher interest rates, leading to a further tightening in financing conditions,” the report said.
Emel Akan contributed to the report.
This article was originally published at The Epoch Times.
