Prices of many groceries and other items have fallen at Walmart, according to CEO Doug McMillon. However, he noted on Thursday that inflation “has been more stubborn” in one particular area of the store: the aisles carrying dry groceries and processed foods, including items like carbonated soft drinks.

During a call following the release of Walmart’s second-quarter earnings, McMillon mentioned that Walmart has been pressuring suppliers to reduce prices. He emphasized that more effort is needed from these companies. “We have less upward pressure, but there are some that are still talking about cost increases, and we’re fighting back on that aggressively because we think prices need to come down,” he said.

Chief Financial Officer John David Rainey told CNBC that Walmart’s overall inflation was flat for the quarter, with revenue growth driven by selling more units rather than charging higher prices. However, price trends varied across products: prices continued to rise for dairy, eggs, sugar, and meat, while they leveled off or dropped for items such as pet food, apples, potatoes, strawberries, sporting goods, and lawn and garden items.

Walmart’s quarterly results led to a rally of other retail stocks, including Target, Best Buy, and Macy’s, on Thursday. Both Walmart’s strong results and better-than-expected retail sales numbers defied concerns of a consumer slowdown.

Walmart exceeded expectations on both the top and bottom lines and raised its forecast to reflect a stronger first half of the year. Rainey told CNBC that consumers have continued to be “choiceful, discerning [and] value-seeking,” but the company’s leaders “don’t see any additional fraying of consumer health.”

All consumer brands, including Walmart, have faced increased scrutiny from shoppers and politicians due to frustration with higher prices. McMillon’s comments about Walmart’s suppliers highlight the pressure grocers are under. Walmart faced criticism on TikTok for introducing electronic price labels, with some users suggesting the company could use the technology to hike prices when demand spikes. Walmart, however, stated it has no plans to change its pricing approach and added the new price tags to save store workers’ time.

Many brands are emphasizing value or introducing new deals as consumers become more selective about their spending. For instance, McDonald’s launched a $5 value meal in late June and extended the offer in most markets. In late May, Target announced price cuts on about 5,000 frequently shopped items throughout the summer, including peanut butter, milk, and meat.

Walmart is also promoting discounts. The retailer reported having 7,200 “rollbacks” — its term for short-term deals — across categories in the quarter ending July 31. This included a 35% year-over-year increase in the number of rollbacks for food.

While Walmart’s profits are growing faster than sales, McMillon attributed this to growth in higher-margin businesses like advertising, rather than higher prices on goods. “We’re not raising prices. We’re lowering prices,” he said. “We don’t want product margins to go up. When we talk about margin improvement in our company, it’s business mix.”