Why Walmart's CEO says Americans urgently need another stimulus check
- Walmart CEO Doug McMillon said more customers spent their recent stimulus checks on necessities, such as groceries, rather than big-screen TVs.
- He said the spending patterns indicate that more families are hurting and need help.
- The retail chief stressed that message when he met with President Joe Biden last week.
When Walmart CEO Doug McMillon went to the White House last week, he said he gave a clear message: Americans urgently need another round of stimulus checks.
Walmart's stores and websites reflect consumers' spending patterns, the retail chief said in an interview with CNBC's Courtney Reagan on "Squawk Alley." The company could tell when they stocked up on food and cleaning supplies in the early part of the Covid pandemic and gravitated toward bikes, puzzles and hair color as they remained stuck at home.
When consumers got the most recent stimulus checks at the end of the year, he said a new pattern emerged: more shoppers put the extra dollars toward buying necessities.
"We can see in our customer behavior that some customers — as they received this most recent stimulus — are spending it more on basics, more on private brands, smaller pack sizes, things like that as opposed to some of the stimulus dollars that came out earlier last year that were spent more like tax rebate checks, where people were buying televisions and things to entertain themselves at home," he said. "There's a bit of a mix shift now and we think it reflects the fact that customers out there do need some help."
McMillon met with President Joe Biden and Treasury Secretary Janet Yellen last Tuesday, along with JPMorgan CEO Jamie Dimon, Gap CEO Sonia Syngal, Lowe's CEO Marvin Ellison and Tom Donohue of the U.S. Chamber of Commerce. He said he urged help for American families and small businesses during that meeting.
Congress and the Biden administration are working on a coronavirus relief bill that could send another direct payment to millions of Americans intended to keep families afloat and help boost an economy hampered by the global health crisis. On Thursday, the Labor Department reported that first-time unemployment filings rose to a total of 861,000 last week. That was higher than the Dow Jones estimate of 773,000.
The current bill calls for direct payments of $1,400 per individual, or $2,800 per married couple, plus $1,400 for both child and adult dependents — but lawmakers are still hammering out a deal and numbers could change.
If approved, it would be the third direct payment to Americans since the start of the pandemic and the largest check so far. The government sent payments of up to $1,200 in the spring and another that was up to $600 in December, but the amounts and eligibility were based on a person's income.
As a major retailer, Walmart would benefit if customers have more money in their pockets. Its chief financial officer, Brett Biggs, told CNBC that its fiscal fourth-quarter earnings got a lift from stimulus payments and it would expect similar results if consumers get another check.
Yet McMillon said he stressed stimulus checks during his Oval Office visit because of what he has seen and heard at the company's stores. He said some families have increasingly dire financial circumstances as they struggle to find work.
McMillon said he recently spoke to a customer who was trying to stretch $20 to cover all of his expenses for the last week of the month, from groceries to gas.
"Those customers are the ones that the stimulus package needs to go help and go help quickly," he said.
— CNBC's Courtney Reagan contributed to this report.
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