Walmart said in February it was not “immunity” due to the costs of President Donald Trump’s tariffs. Now, shoppers are preparing to pay more within weeks.
The retail giant “could start rolling out tariff-related price increases towards the end of this month. I’m certainly looking forward to more in June,” Chief Financial Officer John David Rainey told CNBC on Thursday. Sales increased by 4.5% in US stores, and its e-commerce business was engraved in its first profitable quarter.
Walmart says it is the largest private sector employer in the United States, with 1.6 million locations and 4,700 locations in the US, and it is within 90% to 10 miles of its population. The company generated $165.6 billion in revenue in the first quarter.
Currently, working in retail stores is a rewarding environment.
John David Rainey, Walmart Chief Financial Officer
But despite Walmart’s huge footprint at the heart of the consumer economy, Rainey said “it’s a difficult environment to operate retail right now,” and spoke separately to Bloomberg on Thursday. He showed that the Trump administration needs to go further to resolve cost pressures that have risen by scale and speed without a “historical precedent.”
Walmart stock fell nearly 5% on Thursday morning after its earnings report.
CEO Doug McMillon told investors Thursday that Trump’s 145% tariff on China had “the biggest impact” on Walmart’s sources of toys and electronics out there. He thanked the recent “progress” after the US agreed to lower the effective tariff rate in China to 30% for several months. “We hope that will lead to a long-term agreement,” he said.
Rainey added that in a call from investors he continues to say many tariffs are too high. In some cases, “to approach 50% in other countries is not a good outcome for retailers, not a good outcome for the economy,” he said.
A White House spokesman did not immediately respond to requests for comment.
Walmart is feeling pressured to raise prices for bananas, avocados, coffee and roses due to customs duties in Costa Rica, Peru and Colombia, MacMillon said. He promised that retailers will “do their best to control what we have control in order to keep food prices as low as possible.”
That includes absorbing higher prices and choosing “do not simply pass on the tariff costs that are attributed individually to each item,” McMillon said. “We have suppliers who shift materials from components that have affected tariffs, like aluminum. There are no tariffs there. Our merchants, procurement teams, and suppliers are creative.”
Walmart is firing its starting gun during price increases.
Neil Saunders, Managing Director, GlobalData
Large companies usually have the most room to make such adjustments. For many small operators, tariffs pose an existential threat that will allow large corporate rivals to increase market share, as warn by the powerful US Chamber of Commerce and the independent shopkeepers themselves.
“If Walmart comes out on scale, purchasing power and focus, everyone else will have to follow suit, saying prices will rise,” said Neil Saunders, managing director of retail consultancy GlobalData. “Walmart is firing its starting gun during the price increase period.”
Already, many companies selling products at Walmart, including Stanley Black & Decker, Adidas, Mattel, Procter & Gamble, have signaled prices and expected hikes.
“When the job is gone, of course there will be no price increases,” Adidas CEO Bjorn Gulden said in late April. “Even if this obligation stays or even higher, of course, the market prices generally rise.”
Saunders said that while it expects grocery prices across the retail industry to rise by 3% to 5% by the end of this year, products that rely on global sourcing could rise by 5% to 7%.
“It’s not just the strange 1% that people can almost absorb and ignore,” he said. “We’re looking at pretty big inflation.”
Other big retailers, including Home Depot, Lowes, Target and BJ wholesale, are expected to report revenue for the first quarter next week. Several major consumer brands have already revised or abolished their financial outlook for the remainder of the year, and have struggled to game out how trade policy will affect them.
Walmart maintained its 2025 sales and profit guidance. However, it has decided not to provide guidance on ongoing second quarter operating income or earnings per share because it is “very broad and difficult to predict.”
National retail sales rose just 0.1% in April, falling sharply from the revised 1.7% increase in March, new federal data showed Thursday. Last month’s levels were in line with analyst expectations, but reflects consumers tightening their belts after purchases where they purchased more scoop-ups before more tariffs hit.
Walmart said Thursday it attracted new customers last month and saw growth among shoppers of all income levels.
“They may be a little worried about the possibility of an upcoming price increase,” Rainey told CNBC. But so far, “their behavior has not changed much,” he said. “They are still looking for value.”