You see them on TV, hear them on the radio and have them pop up on your computer, ads that say hurry in for great Memorial Day deals. However, recent news appears to be the opposite. Walmart is forewarning customers that prices are going up at the end of May.
The company’s view on potential price hikes
Walmart CFO John David Rainey told CNBC that tariffs are still too high. As a result, the big box store is upping prices.
He added, “It’s more than any supplier can absorb, and so I’m concerned that the 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.”
The report indicates that Walmart is still hoping to reach its goal of 3% to 4% sales growth for 2025. However, revenue figures for the most recent quarter, which Walmart terms the first quarter of fiscal year 2026, were $165.6 billion, down from company expectations of $165.8 billion. It marks Walmart’s first quarterly revenue miss since 2020. Year-to-year revenue remained up for the world’s largest retailer by 2.5%.
Feeling the pinch
The Trump administration announced a deal with China earlier this week, dropping the tariff on Chinese-made goods from 145% to 30%. Rainey said that Walmart imports about one-third of its products overall, with China and Mexico being its two biggest suppliers.
He said he has not seen a change in customers’ behavior at this point. He said, “They’re mindful. They’re maybe a little concerned about possible looming price increases, but their behaviors largely have not changed. They’re still looking for value.”
Walmart is often viewed as a key indicator of consumer health due to its vast number of stores and huge customer base in various regions throughout the United States.
What’s the plan going forward?
Going forward, analysts believe that retailers like Walmart will need to consider the amount of inventory to order as they try to determine where the tariff levels will settle. Walmart expects suppliers to absorb some of the blow.
So far, CNBC reports that Walmart has not canceled any orders, but is instead reducing the size of the shipments on items that might be hit by the higher tariffs and result in higher prices on the shelves.
While the tariffs continue to be a cause for concern, Walmart is encouraged that its same-store sales were up by 4.5 % for the quarter and 6.7% for Sam’s Club. Same-store sales are a figure used to determine the amount of sales growth attributable to new store openings compared to sales made by stores that have been open for more than one year.
E-commerce or online sales also jumped 21% in what the company calls a milestone.
