Walmart Warns Shoppers to Expect Higher Prices by End of May
Walmart is warning customers that they'll start to see higher prices as soon as the end of May, as new tariffs on imported goods begin to ripple across its supply chain. While the company delivered better-than-expected earnings this quarter, executives were candid that price hikes are unavoidable given the scale of the cost pressures. Read on to see how they'll affect your bill at the checkout.
Walmart Says It Can't Absorb All the Tariff Costs
"We will do our best to keep our prices as low as possible," said CEO Doug McMillon. "But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren't able to absorb all the pressure given the reality of narrow retail margins."
Shoppers Will See Increases Starting in Late May
CFO John David Rainey confirmed that the impact of tariffs will be felt by the end of the month. "There are certain items, certain categories of merchandise that we're dependent upon to import from other countries, and the prices of those things are likely going to go up," he said. "And that's not good for consumers."
Walmart Is Shifting Production and Materials
"We'll move production where that's possible," said McMillon, noting the company has spent years preparing for this kind of disruption. He also described supplier efforts to substitute tariffed materials like aluminum with non-tariffed alternatives such as fiberglass.
Food Prices Could Be Affected by Non-China Tariffs
Walmart says it is prioritizing food affordability, but pressure is mounting. "We won't let tariff-related cost pressure on some general merchandise items put pressure on food prices," McMillon said. "But tariffs on countries like Costa Rica, Peru, and Colombia are pressuring imported items."
Expect Price Volatility Throughout the Year
"The level and speed at which tariff-impacted prices could go up is more extreme than in normal periods," Rainey said. Walmart is maintaining its full-year outlook, but executives cautioned that trade negotiations and inventory timing could lead to price swings.
Walmart Still Projects Strength Despite Headwinds
"We think we can navigate this as well or better than anyone," McMillon said. "But even at the reduced levels, the higher tariffs will result in higher prices."
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