Walmart has disclosed reason for its planned raise in prices in the United States as soon as this month, citing costs increase as a result of the new tariffs on imports imposed by President Donald Trump.
Walmart’s plans follow a White House announcements in recent weeks which 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%.
The chief executive of the world’s largest retailer, Doug McMillon, while reporting to investors on the firm’s performance on Thursday, said he was grateful that the Trump administration had, for now, suspended plans for more aggressive levies.
However, this may not stop the firm from raising prices to cover the new costs.
He said, “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.”
According to the company, more than two-thirds of what items Walmart sells in the US are made, assembled or grown in the country, while China is the dominant supplier in key categories, such as toys and electronics.
The company’s executives also stated that price pressure on staples such as bananas, avocados, coffee and roses was a result of tariffs on countries that have received less attention, such as Costa Rica, Colombia and Peru.
Speaking with the BBC on Thursday, the chief financial officer of the US business outlets, John David Rainey, said shoppers could see higher prices in stores as soon as this month and definitely in June.
BBC reports that in Canada, which had also imposed retaliatory tariffs on US goods, 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.
Loblaw’s chief executive, Per Bank, in a social media post, wrote, “While the tariff situation might be improving between the US and other countries, that’s not yet the case here in Canada.”
Meanwhile, the executives at Walmart 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.
According to the retail company, offering guidance to investors as usual about its profit expectations over the next three months would be difficult due to the “dynamic nature” of the situation.
However, the executives said they were still pushing to meet their original goals over the full year, 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.”
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