Walmart (WMT) cites the growing trend of weight loss drugs, such as Novo Nordisk's (NVO) Ozempic, impacting its food sales. Strategic Resource Group Managing Director Burt Flickinger states that the “significant concerns” of side effects surrounding appetite suppressants should be the focus and states that retailers like Walmart and Costco (COST) “have better prices” for products that could aid consumers in losing weight.

Noting that many consumers are living paycheck to paycheck, Flickinger believes the “second half of this decade” is where the effects of these drugs might be felt by food sellers.

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Video Transcript

- Walmart raising concerns about the popularity of these weight loss drugs like Ozempic and Wegovy on its bottom line. The retail giant saying it's seeing consumers pull back as some analysts warn of bigger issues for food companies as a result of the drugs. Joining us now is Burt Flickinger, strategic resource group managing director.

So Burt, let me ask you this because you're a-- you're an investor watching right now, and you have money you put it to work in fast food chains, candy makers. Burt, should you be worried about these popularity of these appetite suppressing drugs?

BURT FLICKINGER: I know, Josh, and you and Annalee just synthesize it very well, referring to the Jeffrey's research. There is no GLP one jail. So there are only a few million consumers on these drugs. They're significant concerns in terms of side effects, most of them gastro, and the weight population in terms of the CDC. People percent overweight and or obese is doubled in children, adult women, and adult men during the last generation.

So there's plenty of room for weight loss drugs, and there's plenty of room for better nutrition, exercise, health care, and especially private label products from the retailers like Walmart, Kroger, Costco that have better products at much more competitive prices, that people can get good nutrition and live much more healthfully going forward without the risk of drug side effects like the GLP-1 drugs side effects that you and Julie just reported-- you and Annalee just reported.

- Hey, Burt. It's Julie here. It's good to see you. You mentioned Walmart. Walmart, head of US operations, making headlines yesterday for saying that the drugs are having an effect according at least to their data, do you think they're just making excuses or preparing the street for a hit to sales here?

BURT FLICKINGER: Julie, your retail instincts are the best of anybody in the industry. And you're right again because Walmart's slowing is 60% of consumers are paycheck to paycheck, cash to credit constrained crop year prices during the last two years have cut in half. National brand manufacturers haven't lowered the prices. Walmart's getting the benefit of inflation.

But like Dollar General, like Dollar Tree, like Target, Walmart's missing the numbers. So companies like Target on Yahoo Finance near a 52 week low while Novo Nordisk, which I'm also a shareholder as well with all the retailers stock, has doubled during the last year. I think there's-- to quote Alan Greenspan, "a little too much irrational exuberance."

Jefferies is also reported on GLP-1 drugs. Walmart, Target, Costco, Kroger will all do well in the future, but the GLP-1 drugs will not have a meaningful effect until the second half of this decade, not the first half of this decade.