Walgreens is joining other retailers in cutting prices across the board, from snacks to toiletries and even Squishmallows, in an effort to lure back inflation-weary shoppers turned off by high prices.
Prices are dropping immediately on more than 1,500 items online and at its stores, which include both name and store brands, Walgreens announced Wednesday. In the past few weeks, competitors including Target, Walmart and Amazon slashed prices on thousands of household goods to rev up consumer spending.
For example, an 80-count One A Day gummy vitamins jar now cost $11.99, down from $13.49 and the price of a bag of sour cream and onion potato chips from the Walgreens-owned Nice! brand now costs $1.99, down from $2.79. For kids, the price of a 16-inch Squishmallow plush has gone from $24.99 to $20.
“Walgreens understands our customers are under financial strain and struggle to purchase everyday essentials,” said Tracey D. Brown, Walgreens’ retail president and chief customer officer, in a release. “We continue to be committed to our customers by lowering prices on over a thousand additional items, something we’ve been doing since October of 2023.”
Walgreens Boots Alliance’s (WBA) most recent earnings report, released in March, revealed that the retailers’ second-quarter sales beat expectations, but lowered its full-year earnings outlook because of a “challenging retail environment in the US.”
Shares are down 40% year to date and its next earnings report isn’t expected until June. Meanwhile, a host of other retailers report earnings Thursday, including Dollar General and Costco.
A number of big retailers are lowering prices as they strive to pull consumers into stores and online to spend more freely on both essential purchases such as food and more discretionary purchases like new clothes, decorative items for the home, arts and crafts or hobby kits.
Retailers are feeling jittery after they hiked up prices as inflation spiked in recent years. But now, households aren’t shopping like they used to, and high prices are forcing Americans to choose between wants and needs. In the game of chicken between stores and shoppers, it’s the stores that finally appear to be yielding.
That presents an ongoing challenge for the whole American economy, of which about two-thirds comes from consumer spending.
Shoppers have pulled back for a year now as costs have risen 20% to 30% higher than they were three years ago and as incomes failed to keep up, said Sarah Wyeth, managing director, retail and consumer with S&P Global Ratings.
This is making consumers across income levels look for deals. “There’s just less dollars for consumers to spend,” Wyeth said. The challenge for retailers now is to shake consumers out of that frugal mindset, she added.
–CNN’s Parija Kavilanz contributed to this report.
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