Walmart says plans to raise prices despite U.S. tariffs
Wal-Mart warned Thursday that even higher tariffs on China could force the company to raise prices for certain items.
The world's largest retailer says President Trump's extensive taxation on U.S. trading partners is hindering its ability to keep prices low.
“We can control what we can control,” Walmart CEO Doug McMillon said on Thursday’s earnings call, adding: “Even at lower levels, higher tariffs can lead to higher prices.”
Price increases will take effect later this month. Walmart Possible price increase With tariffs increasing costs.
Retailers' cost pressure rises
The Trump administration said on Monday that starting from May 14, Reduce tariff rates About China's imports ranged from 145% to 30%, a total of 90 days. As part of the deal, China will reduce its 125% tariff on U.S. goods to 10%. Despite the ongoing uncertainty about trade policy on the company, negotiations are expected to continue between the two sides.
“The goods we import come from dozens of countries around the world,” McMillon said. “The other large markets besides the United States are China, Mexico, Vietnam, India and Canada. China in particular represents the quantity of certain categories such as electronics and toys. All tariffs put cost pressure on us, but the larger tariffs on China have the greatest impact on China. The cost pressure on all affected markets began in late April and late May.
Nevertheless, Walmart executives stress that retailers will do their best to avoid Pass the import tax to the customer.
“We will do our best to keep food prices as low as possible,” Macmillan said. “In some cases, we will still be under pressure on retail prices.”
Grocery Price Slightly declined last monthAccording to government data, it fell 0.1% from March. However, many household costs are still increasing because CBS News Price Tracker Display.
Walmart has also canceled its quarterly profit outlook amid global economic uncertainty as Mr. Trump vows to reach a good trade deal with countries with huge levies on imports.
Wal-Mart made $4.4 billion in the quarter ended April 30, down from $5.1 billion in the same period last year. Revenue rose 2.5% to $165.6 billion, underestimated analyst estimates.
Tariffs hit consumer spending
Walmart Chief Financial Officer John David Rainey said in a revenue call that the company hopes the U.S. will reach more agreements with trading partners to reduce tariffs.
“But if we see a higher recovery to tariff levels, the impact on our financial impact can be large and even jeopardize our ability to earn the full year,” he added.
Tuan Nguyen, an American economist at the US consulting firm RSM US, said the latest retail data show that consumers are reducing spending in stores and restaurants.
“We are now witnessing the first-order impact of tariffs on the economy – by reducing spending. Second-order impact – prices may appear in the coming months, thus putting additional pressure on demand,” he said in an email.
Contributed to this report.