AN D’Hynenzio, AP Retail Writer
NEW YORK (AP) – Walmart has rarely become the country’s largest retailer by making low prices a priority. It warns customers that prices will rise for items ranging from bananas to car seats.
Executives at the $750 billion company told industry analysts Thursday that they are doing everything in their power to absorb higher costs from the tariffs ordered by President Donald Trump.
However, given the size of the job, it is the best since the 1930s, so prices will inevitably rise, and inflation over the past three years will hurt already laid back Walmart customers.
Trump’s threatened 145% import tax was reduced to 30% in a transaction announced Monday, with some cuts of tariffs at the 90-day suspension.
These higher prices began appearing on Walmart Shelf in late April and accelerated this month, Walmart executives said Thursday. However, larger stab wounds are felt in June and July, when the shopping season returns to school is advanced.
“We’re wired to keep prices low, but there are restrictions on retailers on what they can withstand, or what that is,” Chief Financial Officer John David Rainey told the Associated Press on Thursday after the company reported strong first quarter sales.
Rainey emphasized that prices are rising, not just discretionary items such as patio furniture and trendy fashion, but also basic necessities. The prices of bananas imported from Costa Rica rose from 50 cents per pound to 54 cents. He believes that the Chinese car seats currently on sale at Walmart for $350 will likely cost customers an additional $100. Strollers are also sourced from China, Rainey said.
As many Americans become increasingly unsure about the economy, higher prices arrive as many Americans pull back their spending.
Government data revealed on Thursday that slowed retailers’ sales growth. Walmart says consumers are becoming more cautious and selective.
Tariffs in China and other countries are threatening low-cost models at the heart of Walmart’s success.
Retailers and importers have largely stopped cargo for shoes, clothing, toys and other items due to new tariffs, but many hope to resume imports from China, with narrow windows opened during this week’s temporary “stop” and avoid sparse shelves this fall. However, retailers already operating at thin margins say they have no choice but to raise prices to offset higher costs from tariffs. They are also paying higher shipping costs, driven by a surge in companies scrambling to get goods on ships to the US
Rainey told The Associated Press that retailers didn’t suspend shipments from China as a result of tariffs like others because they didn’t want to hurt their suppliers and wanted to keep the goods flowing. It incorporates hedges against several tariff threats. Two-thirds of Walmart’s products are sourced in the US, and groceries currently account for around 60% of Walmart’s US business.
Still, Walmart is not immune.
CEO Doug McMillon told analysts Thursday that Walmart imports common goods from dozens of countries. However, China, in particular, accounts for the majority of certain categories such as electronics and toys.
Tariffs in countries like Costa Rica, Peru and Colombia are increasing the costs of bananas as well as food items such as avocados, coffee and roses, company executives said. Walmart has absorbed the costs of common goods within the sector and has not taken over the rising costs in some cases.
Walmart is also asking suppliers to replace input materials with components where possible, such as using fiberglass instead of aluminum that Trump collided with tariffs in early March.
“We are very dependent on importing these types of products,” Rainey told The Associated Press.
He said there are some products that Walmart simply cannot shift or produce production in the United States.
Walmart won $50 billion ($4.45 billion per share) in the quarter ended April 30th in the same period last year.
According to Factset, the earnings per share adjustment is 61 cents, exceeding 58 cents forecasts from industry analysts.
Revenues rose 2.5% to $1656.1 billion, but analysts estimates are small.
Walmart’s US equivalent sales (sales from established physics stores and online channels) rose 4.5% in the second quarter, slowing from the 4.6% bump in the last quarter, a 5.3% increase in the third quarter of 2024.
Business was brought about by health and wellness items, not just food. The company said sales were weak due to good sales at home and sports, robust sales of automotive goods and children’s clothing.
Global e-commerce sales rose 22%, up from 16% in the last quarter.
Walmart said it expects sales growth to be between 3.5% and 4.5% in the second quarter.
However, like many other US companies, the chaotic environment did not generate quarterly profit outlook. The company maintained its full-year guidance issued in February.
Original issue: May 15th, 2025 7:12am EDT
