Walmart says price hikes from tariffs coming soon
By: Siddharth Cavale
and Ananya Marlam Rajesh
Reuters
..... Walmart, the world's largest retailer, will have to start raising prices due to the high cost of tariffs, executives said May 15, 2025] in a clear signal that President Donald Trump's trade war is filtering through the American economy.
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As a bellwether of U.S. consumer health, Walmart;s explicit statement is also a signpost for how the trade war is affecting companies. Walmart is noted for its ability to mange costs must aggressively than other companies to keep prices low.
..... The company also declined to provide a profit forecast for the second quarter, even as the company's comparable sales in the United States surpassed expectations in the first quarter.
..... Net sales rose 2.5% to $156.6 billion, a their shy of estimates, while same-store sales were up 4.5%. Many companies in the United States have either slashed or pulled their full-year expectations in the wake of the trade war, as consumers stretch their budgets to buy everything form groceries to essentials sat cheaper prices.
..... But Walmart's statement will resonate nationwide, as roughly 255 million people shop in its stores and Online weekly around the world, and 90% of the U.S. population lives within 10 miles of a Walmart.
..... Shoppers in the United States will
start to see prices rise at the end of May [2025] and certainly in June, [2025] Walmart's chief Finical Officer John David Rainey said in a CNBC interview. On a post-earnings call with analysts, he said the retailer would also have to cut back on orders as it considers price elasticity.
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As the largest importer of container goods in the united States, Walmart is heavily exposed to tariffs, and even though the United States and China reached a truce that lowered levies for imports on Chinese goods to 30%, that's still a high cost to bear, executives said.
..... "We're very please and appreciative of the progress has been made by the administration to bring tariffs down ... but let me emphasize we still think that's too high," Rainey said on the call, referring to the tariff cuts negotiated over the weekend. [05/10-11/2025]
..... "There are certain, certain categories of merchandise that we're dependent upon to import from other counties and the prices of those things are likely going to go up, and that's not good for consumers," he added.
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Walmart CEO Doug McMillon said the retailer would not be able to absorb all the tariff costs because of narrow retail margins but was committed to ensuring that tariff-related costs on general merchandise - which primarily come from China - do not drive food prices higher.
..... Same-store sales in the first quarter grew by 4.5%, driven by increases in both transactions and unit volumes, the company said. Transactions rose 1.6%, while the average spending at the register rose 2.8%.
..... E-commerce sales rose 21%, while globally they rose 22%. This was the first time Walmart's e-commerce business achieved a full quarter of profitability, benefiting form higher-margin business, including Online advertising and its marketplace, the company said.