Walmart, the largest retailer in the US, has warned customers that prices will rise due to the ongoing trade war between the US and China. The retail giant, which prioritized low prices to attract customers, is now facing higher costs from tariffs imposed by President Donald Trump.
Tariffs on Chinese goods have been a significant burden for Walmart, with executives stating that they are doing everything possible to absorb the costs. However, given the magnitude of the duties, higher prices are unavoidable and will hurt consumers already struggling with inflation.
The price increases began to appear on Walmart shelves in late April and accelerated this month. Basic necessities like bananas, car seats, and baby strollers will be affected, with prices rising by 4-6 cents per pound for bananas, $100 for car seats, and an additional cost for baby strollers.
Walmart’s large market share makes its price increases more significant, with 90% of American households relying on the retailer for various products. The company’s website and stores attract over 150 million customers every week, making it a critical factor in understanding the retail landscape.
Government data shows slowing sales growth for retailers, which may be attributed to Walmart’s consumers becoming cautious and selective due to the trade war. As retailers struggle with thin margins, they are forced to raise prices to offset higher costs from tariffs.
Walmart has built-in hedges against some tariff threats, importing 60% of its US groceries from domestically sourced suppliers. However, the company remains vulnerable due to its reliance on imports for certain products, particularly electronics and toys sourced from China.
CEO Doug McMillon expressed hope that further tariffs would be reduced, but Walmart’s executives emphasize that prices will rise despite efforts to absorb costs. The retailer’s earnings report shows adjusted earnings per share exceeding analyst projections, with revenue rising 2.5%.
Source: https://apnews.com/article/walmart-earnings-tariff-consumers-inflation-773f7de5081c40a98c98fbb293fa5f96