US retail giant Walmart has warned on profits for the second time this year, as soaring inflation curbed customer spending

Walmart InHome van

Walmart is scheduled to publish its second-quarter statement on August 16

In an update overnight, Walmart said it now expects full-year profits to fall by as much as 13%. The announcement sparked a 10% slump in the retail giant’s stock market value in after-hours trading, and dragged down shares in rivals Amazon and Target. 

When Walmart warned on profits for the first time in May, it said it expected full-year profits to fall just 1% by year’s end. 

“The increasing levels of food and fuel inflation are affecting how customers spend,” its chief executive Doug McMillon said in a statement on Monday (July 25).

In a bid to arrest the slump, McMillon said Walmart would cut clothing prices as it was “anticipating more pressure on general merchandise in the back half” of the year. 

Also on Monday, Amazon raised the price of its Prime subscription service for UK and European customers because of “increased inflation and operating costs”. 

The announcements come as prices in the US and UK rise at their fastest rate in four decades, driven by higher petrol and food costs. 

The ongoing war in Ukraine, and supply chain issues unspooling after the pandemic, have driven inflation on everyday costs for both consumers and businesses. 

Walmart is scheduled to publish its second-quarter statement on August 16.

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