Walmart is preparing to raise prices in the US as soon as this month, as its own costs increase as a result of the new tariffs on imports imposed by President Donald Trump.
The plans by the world’s largest retailer come as White House announcements in recent weeks have resulted in most goods from around the world facing new import taxes of at least 10%, with products from China facing higher duties of at least 30%.
Reporting to investors on the firm’s performance on Thursday, chief executive Doug McMillon said he was grateful that the Trump administration had, for now, suspended plans for more aggressive levies.
But he said that his firm was still likely to raise prices to cover the new costs..
“We will do our best to keep our prices as low as possible but given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure,” he said.
More than two-thirds of what Walmart sells in the US is made, assembled or grown in the country, the company said.
But China is the dominant supplier in key categories, such as toys and electronics.
Executives also warned that tariffs on countries that have received less attention such as Costa Rica, Colombia and Peru were putting price pressure on staples such as bananas, avocados, coffee and roses.
In interviews with US business outlets on Thursday, chief financial officer John David Rainey said shoppers could see higher prices in stores as soon as this month and definitely in June.
In Canada, which put its own tariffs on US goods in retaliation for Trump’s measures, the boss of major retailer Loblaw’s also warned that Canadians were set to see a “large wave of tariff-related increases in the weeks ahead” as the retailer runs out of supplies purchased before the new duties were in place.
“While the tariff situation might be improving between the US and other countries, that’s not yet the case here in Canada,” Loblaw’s chief executive Per Bank wrote on social media.
The updates come as Trump’s trade war renews focus on how consumer spending – the main driver of the US and Canadian economies – will hold up in the face of price rises, and what that might mean for wider economic growth.
At Walmart, executives said they were focused on shielding food from price hikes and in a strong position to rapidly adjust what they are buying if shoppers start to baulk at higher prices.
The company said it could not offer guidance to investors about its profit expectations over the next three months, as it would ordinarily do, because of the “dynamic nature” of the situation.
But over the full year, executives said they were still pushing to meet their original goals, including plans to increase profits faster than sales – an indication that they expect to be able to pass on higher costs to the consumer without taking a major hit.
“We don’t see anything that changes the way we think about our business long-term,” the company’s executives told analysts. “We think we can navigate this.”
For now sales appear to be holding up. After a slow February, which executives blamed on bad weather, purchases ticked up in March and April.
Overall revenue in the February to April period rose 2.5% year-on-year to $165.6bn, with sales at US Walmart stores open at least a year up 4.5%.
Profits were $4.4bn, down 12% year-on-year.
