After Walmart, the largest retailer in the United States, warned last week that it would have to raise prices due to tariffs, U.S. President Donald Trump recently publicly criticized the retail giant on social media.
“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain. Walmart made BILLIONS OF DOLLARS last year, for more than expected. Between Walmart and China they should, as is said, “EAT THE TARIFFS,” and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!”
“We have never seen price increases of this magnitude and speed before, which makes this a challenging environment,” Walmart Chief Financial Officer John David Rainey said in an interview with the media on Thursday.
As the largest retailer and grocery seller in the United States, Walmart’s performance is often seen as a barometer of the health of U.S. retail and consumers.
Rainey said he was pleased with the progress the Trump administration had made on tariffs, even though current rates were still too high. The administration had previously granted a 90-day reprieve from tariffs, lowering the rate on Chinese imports to 30%. Goods from dozens of other countries still face a 10% tariff. Walmart imports electronics and toys from China, and agricultural products such as avocados and bananas from Central and South America.
Walmart wants to keep its prices below those of competitors, especially as consumers increasingly seek discounts, he said. To that end, Walmart will absorb some of the costs associated with the tariffs and expects its suppliers to bear some of the higher costs as well.
Rainey said Walmart will “work hard with our suppliers to keep prices as low as possible,” a stance the company reiterated in response to Trump’s comments.
“We have always been committed to keeping prices as low as possible, and that commitment remains unchanged,” Walmart said in a statement. “Given the reality of retail profit margins, we will maintain prices as low as possible within our ability.”
Walmart joins a growing list of companies that have raised prices or warned of price hikes due to tariffs. Earlier this month, Microsoft announced it had increased the suggested retail price of its Xbox game consoles and some controllers.
Barbie maker Mattel announced earlier this month that it would move production out of China but still expects prices for its toys to rise, and Ford Motor Co. warned last week that it would have to raise prices on some of its models.
Walmart on Thursday maintained its full-year sales forecast but did not provide second-quarter earnings or operating income forecasts, citing the Trump administration’s changing tariff policies.
Bill Simon, former Walmart U.S. CEO, said Walmart’s business is strong enough to withstand the pressure from tariffs without raising prices.
Simon served as president of Walmart’s U.S. region from 2010 に 2014. He believes Walmart may be exaggerating the challenges related to tariffs. “If you look closely at the details of the earnings report they released today, you will find that their gross margin in the U.S. business increased by 25 basis points this quarter. それで, their profit margin is expanding,” he said in an interview with the media.
“That gives them plenty of room, in my opinion, to deal with any tariff impact.” Simon is optimistic that consumers can largely absorb price increases, pointing to a stable job market and lower fuel prices this year. But he also noted that pessimistic comments from corporate executives about price increases may be eroding consumer confidence.
“All the doom and gloom we’re hearing about price increases and tariffs — like I heard today from my friends at Walmart — I think it’s really going to scare consumers.”
