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Walmart has warned that U.S. shoppers could soon see higher prices as the retailer manages the impact of new import tariffs introduced earlier this year.
Walmart, the world’s largest retailer, said Thursday that it may need to raise prices in the coming weeks due to rising import costs tied to recent tariff changes. Despite a strong quarter with $165.6 billion in sales - up 2.5 percent year-over-year - CEO Doug McMillon confirmed the company is feeling cost pressures that may soon affect consumers.
Analysts have generally viewed Walmart as more protected from global trade shifts due to its strong grocery business, which accounts for about 60 percent of its revenue and is largely U.S.-sourced. The retailer’s growing popularity among higher-income shoppers, who contribute through memberships and delivery fees, also gives it flexibility to keep prices steady on essentials.
Still, Walmart’s warning indicates broader challenges across the retail sector. “If Walmart says they’re struggling [on price], then you know everyone else is going to struggle a little bit more,” said CFRA Research analyst Arun Sundaram.
Walmart has historically gained market share during economic uncertainty, such as in 2008 and during the pandemic. CFO John David Rainey said the company plans to “play offense” again, even if it faces short-term financial impacts.
Its strong position is supported by a profitable U.S. e-commerce segment - which grew 21 percent last quarter - and a customer base willing to pay extra for faster delivery. “Walmart is typically the last to raise prices,” said Telsey Advisory Group analyst Joe Feldman. “They’re better positioned to handle it than anybody else.”
Tariffs on goods from countries like Vietnam and Taiwan are expected to affect non-grocery categories such as clothing and electronics. But Walmart’s heavy focus on food and its diversified sourcing reduce exposure compared to competitors.
Still, some imported groceries - such as bananas, avocados, and coffee - have already become more expensive due to tariffs on goods from countries like Costa Rica and Colombia. McMillon said Walmart has worked for years to shift sourcing from China to other countries, a process that remains complex.
While Walmart imports fewer goods from China than competitors like Amazon and Target, the company is not immune. Analysts estimate about 10 percent of its imports come from China, compared to 20 percent for Amazon and 30 percent for Target.
Walmart’s large scale gives it key advantages, including lower shipping costs and the ability to adjust sourcing quickly through its supplier networks. The company pays up to $600 less per shipping container and can shift production from one country to another with fewer disruptions.
Even as costs rise, Walmart remains committed to keeping food prices stable and distributing import-related expenses across broader product categories. “We’re not fully immune,” Rainey said, “but we’re better positioned than most.”
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