Walmart is now discounting 7,200 items and it’s not done yet

Earlier this summer, the retail giant said it had stepped up the fight with promotions on nearly 7,000 items, up 45 percent from the previous year.

CEO Doug McMillon says the number of “rollbacks” has topped 7,200, with more room to run.

“It’s great to see prices coming down,” he said during the company’s second-quarter earnings call. “We’re wired to help lower prices and will continue to work to get more rebates to help customers and members save money.”

Fitch Ratings senior director David Silverman called the accelerated downgrades “a clear signal that consumer price inflation is moderating” in a note on the results.

Like many large retailers, Walmart sells a mix of national brand items — Pepsi soda and Colgate toothpaste, for example — and domestic private-label goods (Great Value, Equate and, most recently, Bettergoods).

Prices in the grocery aisle saw the biggest jumps in the first, as consumer goods companies admit they made sizable profits during the inflationary environment.

The latter is where Walmart has the most flexibility to lower prices more quickly, which it has done. It’s even given rise to the notion of “value hacking,” or combining national brand and private label products in one shopping cart to save money, like skipping Rao’s Marinara to go to Great Spaghetti Value.

According to consumer analytics firm Numerator, Walmart’s private-label pricing has proven so effective that store-brand sales have risen to 30 percent of total sales. That’s not far from Costco and Sam’s Club.

The low-price strategy has also helped Walmart attract new customers from all income brackets — market share gains have supported the company’s sales performance in recent quarters as other retail brands have slowed.

But McMillon said Walmart has no interest in becoming more like the private brands Trader Joe’s or Aldi: “We want to sell brands. It’s important for Walmart to sell brands and show value.”

“We hope that our brand suppliers will do the right thing with both quality and price to get to the value that our customers want to see,” he added.

In other words, Walmart wants to see national brand prices match domestic brand prices.

“Those price differences are bigger than I think we’ve seen in a very long time,” Jefferies retail analyst Corey Tarlowe told Insider.

The main way this happens is through vendor-sponsored promotions, where national brands negotiate discounts on their products that Walmart can pass on to its shoppers.

Between sizable profits in recent years and the popularity of private label brands, Tarlowe said national brands have plenty of room (and incentive) to work with Walmart to offer better deals for customers.

“There are tens of thousands of items in a Walmart store, so to see returns on 7,200 is still a relatively good number,” he added, “You’re going to see it go up, but by how much? We’ll see.”