BENTONVILLE, Ark. — Walmart has confirmed it will raise prices on a range of products starting later this month, driven by rising costs from U.S. tariffs on imports from China, Latin America, and other trade partners. The retail giant says it can no longer fully absorb the impact of President Trump’s tariff policy, which continues to disrupt global supply chains and pressure retail margins.
“We will do our best to keep our prices as low as possible. 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,” Walmart CEO Doug McMillon said in a call with investors Thursday. “The higher tariffs will result in higher prices,” he added.
CFO John David Rainey said in an interview with CNBC that tariffs are “still too high,” despite an announced agreement with China on lower import duties. “We’re wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb,” he said. “It’s more than any supplier can absorb. And so I’m concerned that consumer is going to start seeing higher prices. You’ll begin to see that, likely towards the tail end of this month, and then certainly much more in June.”
Categories most affected include toys, electronics, and select grocery items such as bananas, avocados, and coffee. Tariffs on imports from China, Costa Rica, Peru, and Colombia are hitting these categories.
Despite the challenges, Walmart reported 4.5% U.S. same-store sales growth and its first profitable ecommerce quarter. The company attracted more shoppers across income levels, especially higher-income households, a trend that accelerated during prior periods of inflation.
Thorvardur de Shong
Walmart’s scale and diversified supplier network provide a strategic advantage over smaller competitors. However, the retailer is signaling that price increases across the sector are now inevitable. Retail analysts warn that Walmart’s decision could trigger a broader wave of inflation throughout the industry.
“If Walmart’s coming out — with its scale and its buying power and its focus — and saying prices are going to rise, everyone else is going to have to follow suit,” said Neil Saunders, managing director at retail consultancy GlobalData to NBC. “Walmart is firing the starting gun on a period of price increases.”
Last month, the CEOs of Walmart, Target, and Home Depot met privately with President Trump to share concerns over trade policy. The executives warned that steep tariffs are already disrupting operations and creating uncertainty in supply planning.
Walmart’s team says it is exploring ways to mitigate the impact, including substituting tariff-affected materials and consolidating supplier relationships, but noted that not all costs can be avoided. The retailer did not issue profit guidance for Q2, citing the “exceedingly wide range of near-term outcomes.”
With Walmart raising prices, other big-box retailers like Target, BJ’s, and Lowe’s are expected to feel similar cost pressures heading into summer.
Key Takeaways:
- Walmart will increase prices starting in late May due to high U.S. tariffs.
- Toys, electronics, and groceries are the most impacted categories.
- The company cited unprecedented inflationary pressure from tariffs on China and Latin America.
- Despite strong earnings, Walmart withheld Q2 profit guidance.
- Analysts expect industry-wide price hikes to follow.
