• Rising food prices are starting to affect people's spending habits, Walmart said. 
  • The company warned that customers are not buying as much clothing and other merchandise because of high food and fuel costs. 
  • This comes as inflation continues surging in the US, affecting the price of food, fuel, and other products.

Rising food and gas prices are starting to take a hit on Walmart customers' spending habits, according to the company. 

The box-box store said late Monday that "double-digit" food inflation has hurt sales in other areas of Walmart's stores — and will continue to do so for the rest of this year. The company said earnings per share for its fiscal 2023 will fall about 11% to 13%, coming in below the latest Wall Street estimates.

Walmart said customers have slowed down spending on other items, like clothing, as a result of climbing grocery prices eating into their paychecks. 

The company said it has had to mark down clothing prices recently in order to sell them to customers and "reduce inventory."  

"The increasing levels of food and fuel inflation are affecting how customers spend," Walmart CEO Doug McMillon said in a press-release statement. 

McMillon warned that he anticipates even more pressure on spending through the second half of 2022. 

Walmart shares were down 8.8% in recent after-hours trading.

Walmart's warning comes as inflation overall continues to climb in the US. 

The latest government consumer price data from June found that food prices have risen more than 10% from last year. 

In May, McMillon said that the company planned to switch certain products in its deli, lunch meat, and dairy sections to lower-cost items since inflation could cause more customers to cut back on spending on premium brands. 

Rising food costs are not the only issues Walmart has to deal with right now.

Earlier Monday, Insider reported that Walmart has allowed employees to pause its internal automatic ordering system due to stores not being able to sell products fast enough, according to a leaked memo. Boxes of unsold products have piled so high in some stores that they block access to bathrooms, according to Insider's reporting. 

Read the original article on Business Insider