The company said it hopes falling food prices will free up shoppers' wallets to buy other merchandise. AdvertisementJust as inflation refers to rising prices, "deflation" refers to prices falling — and even though it may help consumers, it presents a surprisingly tricky challenge for businesses and policymakers. In contrast to periods of rising inflation in which corporate profit margins typically grow, deflation tends to squeeze companies in a few ways. AdvertisementThe upside of falling food prices for Walmart — more than say Kroger or Albertsons — is that Walmart sells a whole lot more than groceries. "If the food prices come down," McMillon said, "that'll free up dollars to be spent in general merchandise."

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Persons: —, Doug McMillon, it's, McMillon, John Furner Organizations: Walmart, Service, Rabo Research, Albertsons