Consumers demanding discounts and daily staples to get through high inflation

High petrol prices and rising interest rates are having an impact on what we shop for, according to Walmart.

US retail giant Walmart cut its profit outlook as surging inflation prompts shoppers to cut back on expensive items to buy essentials.

The world’s biggest retailer now expects a double-digit decline in operating income for the second quarter and full year.

Walmart had earlier predicted a decline of just one per cent, but that’s now risen dramatically.

The company now expects adjusted earnings per share to fall by 8% to 9% for the fiscal second quarter and 11% to 13% for the full year.

“Food inflation is double digits and higher than at the end of Q1,” the company stated in a release.

“This is affecting customers’ ability to spend on general merchandise categories and requiring more markdowns to move through the inventory, particularly apparel.”

“The increasing levels of food and fuel inflation are affecting how customers spend, and while we’ve made good progress clearing hard-line categories, apparel in Walmart U.S. is requiring more markdown dollars,”

“We’re now anticipating more pressure on general merchandise in the back half,” Chief Executive Doug McMillon said in a statement.

The warning from the retailer sent its shares into a dive, dropping 8 per cent in after-hours trading.

Its warning comes ahead of earnings updates from online retailer Amazon and McDonalds.