Walmart’s CEO has acknowledged the high cost of the retailer’s products.

During Walmart’s second-quarter 2025 earnings call, the chain’s CEO Doug McMillon emphasized the company’s commitment to delivering value to customers through a strategic focus on cost reduction.

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“We are fighting back aggressively because we believe prices need to be lowered,” he said in the conference call.

McMillon emphasized that while Walmart aims to sell branded products, the success of its private labels also plays a critical role in maintaining competitive prices.

He noted: “Our teams do a better job with private label, both in terms of product development and in terms of its quality and value.”

The CEO discussed the complexity of pricing dynamics in different product categories.

He mentioned that fresh food pricing responds to supply and demand and fluctuates with market conditions, while prices for general merchandise have fallen.

However, McMillon cautioned that price declines may not continue at the same pace, particularly in dry foods and processed foods, where inflation remains a challenge.

Despite the current situation, McMillon continues to hope for cooperation from brand suppliers in investing in price reductions.

“The upward pressure is less, but there are some who still talk about cost increases,” he noted.

Looking ahead, McMillon expects prices to stabilize rather than fall significantly.

“I don’t expect us to see a sharp decline in our numbers going forward,” he noted, suggesting that Walmart will continue to adjust its pricing strategy to market conditions, taking into account both customer needs and supplier dynamics.

Different values

During the conference call, McMillon also addressed investor questions about the company’s performance in various income groups, focusing particularly on how these segments contribute to overall revenue growth.

Responding to questions from attending BMO Capital Markets representative Kelly Bania, McMillon highlighted the impact of high-income households on Walmart’s success while recognizing the importance of value for all consumers.

Bania stressed that investors are curious about how the company’s comparable sales are performing among low-income households and asked whether growth is being driven primarily by higher-income buyers.

McMillon confirmed that while there is a clear trend toward share gains among high-income households, value remains a general concern across all income levels.

“Value is important to everyone,” he said, “whether your income is above or below $100,000.”

An important observation made by McMillon is that consumer behavior varies considerably depending on income level.

Lower-income households tend to focus more on initial prices and exhibit different shopping behavior, especially towards the end of the month when budgets may be tighter.

However, McMillon stressed that these households still rely on Walmart for access to affordable everyday goods, citing the retailer’s role as an important resource for all income levels.

In contrast, higher-income shoppers are more likely to spend more on non-everyday goods and value convenience – a trend that Walmart is strategically serving.

McMillon noted that Walmart has expanded its offerings to meet the needs of this demographic, thanks to initiatives such as Walmart Plus membership, improved delivery options and ongoing store remodeling, among others.

“I think that in our future there will be a different distribution of income than in the past, for practical reasons,” he said.

In other Walmart news, a customer accused the retailer of being a bully for charging undisclosed third-party shipping fees on online orders.

McMillon also explained why the company does not accept Apple Pay, which comes at the same time as the removal of self-checkout machines from certain stores across the country.