Walmart says it has been able to manage tariff-related expenses so far, but those costs are increasing weekly and are expected to persist through the end of the year. The world’s largest retailer, along with competitors like Home Depot and Target, faces mounting pressure from the Trump administration’s broad tariffs on imports, which are reshaping consumer behavior and pricing strategies across the retail sector.
Tariffs Driving Higher Costs
Walmart CEO Doug McMillon reported that costs have steadily risen each week and will continue climbing in the coming quarters. While the company has raised prices on some items, it has kept prices steady or even lower on others, including back-to-school products. Still, the tariffs on virtually all imports are creating unavoidable cost pressures for retailers. McMillon noted that, so far, customer reactions have been muted due to the gradual rollout of tariff impacts.
Impact on Shoppers
Walmart continues to attract more higher-income shoppers searching for value, while middle- and lower-income customers have become selective, sometimes switching products or skipping purchases. Despite these shifts, McMillon said shopping behavior has not dramatically changed. U.S. sales for Walmart rose 4.6% in the latest quarter, indicating continued consumer demand even as tariffs shape the retail environment.
Competitor Challenges
Home Depot and Lowe’s have also reported challenges from rising tariffs. Home Depot’s U.S. sales grew 1.4% in the most recent quarter, with customers focusing on smaller projects while delaying larger renovations due to economic uncertainty. CEO Ted Decker emphasized that broader economic concerns outweigh individual pricing issues. Lowe’s described the current environment as “uncharted waters,” while discount retailer TJX said it had stockpiled extra inventory to stay prepared.
Economic Context
President Trump’s executive order imposing tariffs was signed in April, but the staggered rollout allowed retailers to manage some of the impact by stockpiling goods and adjusting supply chains. However, with tariff rates now significantly higher, retailers are being forced to increase prices selectively. Analysts warn that as tariffs become more fully embedded into the system, cost pressures will continue to affect both businesses and consumers.
Conclusion
Walmart and other major retailers are navigating a complex balance: absorbing tariff costs while limiting price increases to retain shoppers. As the full effects of tariffs take hold, rising costs and economic uncertainty could weigh more heavily on consumer behavior, leaving retailers in a delicate position heading into the year’s final quarters.