Shoppers at a Walmart store in Secaucus, New Jersey, on March 5, 2024. Walmart is revamping more than 800 store locations and adding high-end products.
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Americans might be noticing markdowns for some everyday essentials during their weekly grocery runs. That doesn’t mean the battle against inflation is won.
Walmart saw first-quarter sales at stores open at least a year climb 3.8% from the prior year, in part thanks to its ability to keep prices low even as inflation remains sticky. The largest retailer in the United States has been a mainstay for cash-strapped consumers shopping for deals on groceries and other merchandise.
Now Walmart is taking things one step further. The superstore said on May 16 that it has rolled back prices on nearly 7,000 items in its stores, noting deflationary trends in general merchandise. Inflation during the first quarter increased at half the rate seen last year, it added.
“Our combination of everyday low prices plus a large number of rollbacks is resonating” with consumers, Walmart CEO Doug McMillon said on a call with analysts.
On Monday, Target slashed prices on more than 1,500 items, ranging from laundry detergent to cat food to sunscreen, with thousands more price cuts expected over the summer. For example, the price of a pack of 16 Huggies baby wipes fell to 99 cents from $1.19 and roasted nuts from the Good & Gather brand now cost $5.29 from $6.89, according to a press release.
The company on Wednesday reported its fourth consecutive quarter of sales declines at stores open for at least one year as higher prices strain Target’s core middle-class customer base.
Other retailers including Ikea and Aldi have also reduced prices in recent months.
Some economists say that while price cuts from retailers are a welcome sign that inflation overall has come down, inflation in other areas also needs to ebb to reach the Federal Reserve’s 2% target.
Price cuts at big box retailers are “going to be helpful, but we’re still going to have to see housing inflation come down, which is an issue, and wage growth continue to normalize,” said Preston Caldwell, senior US economist at Morningstar Research Services.
The median price of a previously owned home in the United States grew 5.7% in April from a year earlier to $407,600, the highest April price on record. Wage gains slowed last month but are still above historical averages.
The Fed’s progress on tamping down inflation stalled during the first quarter of this year, raising concerns that the central bank won’t cut rates until this fall or even next year. Unemployment remains at historic lows, worrying some that the Fed will want to see the job market cool further before deciding to ease its restrictive policy.
Still, recent data has suggested that inflation is cooling again. Consumer prices rose 3.4% for the 12 months ended in April, easing from 3.5% the month before, according to data from the Bureau of Labor Statistics. Investors will get more inflation data next week from the Personal Consumption Expenditures index for April.
The economy is also showing signs of cooling. Americans are falling behind on their payments, running down their pandemic savings and becoming more frugal. Retail sales were unchanged last month from March, when spending increased by a downwardly revised 0.6%, in another sign that consumers are dialing down their spending.
Why OpenAI should fear a Scarlett Johansson lawsuit
Will Scarlett Johansson sue OpenAI for creating a voice assistant that sounds like the actor’s performance in the 2013 film “Her,” about a man who falls in love with an artificial intelligence?
That’s how things could go after Johansson said OpenAI tried to hire her to voice an AI assistant for ChatGPT and, when she refused, forged ahead with a sound-alike voice. OpenAI’s co-founder and CEO, Sam Altman, could be directly in the crosshairs of such a lawsuit, writes my colleague Brian Fung.
Now, legal experts say Johansson may have a powerful and credible claim in court if she does decide to sue, pointing to a long string of past cases that could lead to significant damages for one of the world’s leading AI companies and raise questions about the industry’s readiness to deal with AI’s many messy complications.
That OpenAI was apparently unaware of that legal history, or at worst willfully ignorant of it, highlights what some critics say is a lack of industry oversight in AI and a need for greater protections for creators.
OpenAI didn’t immediately respond to a request for comment.
There are two types of law that could potentially be involved here, according to legal experts, but only one is likely to come into play based on the currently known facts.
Read more here.
Citi just got the bill for its $189 billion trading near miss
UK regulators slapped a combined £62 million ($79 million) fine on Citigroup Wednesday for failures in its trading systems that almost resulted in stocks worth $189 billion being dumped onto European markets, reports my colleague Anna Cooban.
The Financial Conduct Authority (FCA) imposed a fine of nearly £28 million ($36 million) on Citigroup (C), while the Bank of England’s Prudential Regulation Authority fined it almost £34 million ($43 million) following investigations into the US bank, according to statements from the authorities.
The regulators reduced their fines by 30% because Citigroup agreed to settle the matter. Without that discount, the combined fine would have topped £88 million ($112 million).
“We are pleased to resolve this matter from more than two years ago, which arose from an individual error that was identified and corrected within minutes,” a Citigroup spokesperson told CNN. “We immediately took steps to strengthen our systems and controls, and remain committed to ensuring full regulatory compliance.”
The spokesperson declined to comment on reports that the trade was the result of a fat-finger error, where incorrect data is inputted because the wrong key is pressed.
Read more here.
