Walmart to raise prices this month due to Trump tariffs

Walmart, the global retail giant, has announced it will begin increasing prices this month in response to rising tariff costs, a move that signals a challenging period ahead for consumers. Shoppers in the United States are expected to notice the change in prices by the end of May, with effects becoming more prominent in June, according to John David Rainey, Walmart’s Chief Financial Officer, during an interview with CNBC.

The company’s CEO, Doug McMillon, stated, “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 given the reality of narrow retail margins.” Despite this, Walmart has maintained its annual sales and profit forecast for fiscal 2026, anticipating annual sales growth of 3% to 4%.

This development comes as global trade continues to face uncertainties due to the policies introduced by Donald Trump’s administration. Earlier this week, the United States and China agreed on a 90-day trade deal that involved both nations reducing tariffs on imports. While this agreement has been welcomed by businesses and investors, economists caution that the full impact of tariffs on consumer prices is yet to be felt. April’s inflation data revealed stable prices, but ongoing trade tensions are causing businesses to adopt a more conservative approach.

Consumer sentiment in the US has declined for the fourth consecutive month, indicating restrained spending amidst concerns over inflated costs and broader economic volatility. The US GDP contracted in the first quarter for the first time in three years, raising alarms of a potential recession. This cautious attitude among consumers is particularly impactful for Walmart, whose business model thrives on offering everyday essentials at competitive prices but at razor-thin margins.

Jerome Powell, Chair of the US Federal Reserve, also noted this week that long-term interest rates are likely to stay elevated as a result of increasingly unpredictable policy shifts. Addressing a policy conference, Powell stated, “We may be entering a period of more frequent, and potentially more persistent, supply shocks – a difficult challenge for the economy and for central banks.”

Despite the short-term uncertainties, Walmart expects consolidated net sales in the second quarter to grow between 3.5% and 4.5%, surpassing previous forecasts of 3.46% growth. However, the retailer has chosen not to provide guidance on second-quarter operating income growth or earnings per share due to the widening range of unpredictable outcomes in the near term. The company’s CFO expressed optimism about navigating the challenges, stating, “With a longer view into the full year, we believe we can navigate well and achieve our full year guidance.”

Walmart remains a bellwether for US consumer health and the retail industry’s resilience, offering valuable insights into how businesses navigate economic turmoil and adapt to evolving trade policies.