Walmart declared during its quarterly earnings call on Thursday that it would be increasing prices at its stores as a result of the high import tariffs.
“Given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure,” Stephanie Schiller Wissink, Walmart’s senior vice president, told investors during the call.
President Trump suggested that Walmart “eat the tariffs” instead of raising prices for consumers in a Truth Social post that followed the announcement.
Although it’s still unclear how much of a price increase you can anticipate, prices at Walmart stores across the country and online will begin to rise as early as late May and particularly in June. Here is what we currently know about the plans of the major retailer.
Why is Walmart increasing its prices?
Businesses worldwide have been impacted by the recent tariffs that have been implemented over the past few months. Tariffs have increased the cost of everything from cars to baby supplies.
However, because a large portion of its products are sourced from the US, Walmart has so far been relatively immune to the effects of the trade war.
According to Wissink, “over two-thirds of what we sell in the U.S. is made, assembled, or grown here.” However, not all of Walmart’s products are produced domestically, and in some circumstances, there are no American suppliers that could take the place of Walmart’s foreign suppliers.
As a result, some items on store shelves will cost more
The Senior Vice President repeatedly underlined that Walmart was able to absorb some of the costs in order to keep prices for customers as low as possible, even though the retailer did not specify the precise amount of the price increases.
The success it has seen in other areas of its business contributes to its ability to absorb the cost.
The major retailer noted a nearly 15% increase in membership income over the first quarter and a significant increase in Walmart Plus memberships during the earnings call on Thursday.
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Because its everyday low prices have always been one of its main draws for customers, this and other growth sources have helped the company avoid raising prices.
Walmart is increasing costs, but not for food
Walmart intends to keep food prices as low as possible in order to lessen the impact of tariff price increases on its customers. “We will not allow pressure on food prices from tariff-related cost pressure on certain general merchandise items,” Wissink stated.
Walmart intends to keep the cost of other foods as low as possible, even though some imported foods that aren’t normally grown in the US, like avocados, coffee, and bananas, may become more expensive.
Rather, consumers are most likely to experience the effects when purchasing toys and electronics, which are primarily imported from China, according to the retailer.
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This also applies to other retailers. Last month, Amazon, one of Walmart’s main competitors, briefly contemplated including tariff charges on its product pages.
The e-commerce behemoth is even more susceptible to tariffs than Walmart because more than 70% of its products are sourced from Chinese suppliers.
