At Goldman Sack’s 30th annual Global Retailing Conference on Sept. 12, Doug McMillon, Walmart CEO, addressed grocery inflation, indicating that it will continue to go down, however, at least in the short term, food prices are unlikely to return to their levels from two years ago. 

“Inflation and higher prices are kind of with us. We’ll see disinflation, but not all the way back to deflation ... certainly not in the short term,” McMillon says, adding that he would like to have lower prices faster for consumers.

The Consumer Price Index data for August, released by the U.S. Bureau of Labor Statistics, show that food-at-home prices during the month increased at a 3% annual pace while overall inflation rose to 3.7%.

The release showed that food prices are up 10.9% from the previous year.

On the consumer behavior front, McMillon said that the job market, wage increases, and some pockets of disinflation have helped spending.

“In the U.S. things are better than I would have expected them to be when we started the year,” he said. “I was concerned about the amount of inflation in categories like dry grocery, consumables and how that would impact discretionary purchases.”

On a positive note, Walmart’s prices will likely be slightly lower in 2024 than this year but higher than two years ago, McMillon says, noting that the retailer’s price gaps are “in a healthy place.”

“I’ve been doing this now for more than 32 years, and I’ve never seen an opportunity to step change the supply chain like the one that’s right in front of us,” McMillon adds.