Retail news that keeps industry pros in the know
Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.
Rollbacks are rising at Walmart, and vendors are footing the bill, CFO John David Rainey said during a fireside chat with Robby Ohmes, managing director of Bank of America Global Research at the NYSE 2024 London Investor Conference.
“Generally speaking, rollbacks for us are primarily vendor-funded,” Rainey said. “We’ll fund some of those ourselves, but our rollback count is up 45% year over year right now. So we’re certainly trying to provide that value to our customers.”
A rollback is Walmart’s in-house term for temporary price reductions on select items, and it’s been a centerpiece of the retail giant’s pricing strategy for decades. Rainey described it as “a good way for us to test elasticities of prices and see how customers respond before maybe we make something more permanent.”
He added that the rollback count “ebbs and flows from one quarter to the next,” but that Walmart is at a “pretty high point right now.”
All about the units: However, price isn’t king at Walmart these days. As Rainey pointed out, “the composition of our revenue growth is entirely driven by units right now.” That means volume rather than price is driving growth for the company, which is a trend that’s playing out at other major retailers as well.
He emphasized that “convenience” is an underappreciated factor in Walmart’s recent success: “We’ve really upped our game in terms of what we’re doing in our e-commerce offering and our ability to fulfill that as customers demand,” he said.