Walmart Is Hiking Prices on Essential Groceries as Tariff Pressures Mount

Your next trip to Walmart could be more expensive, and according to the retail giant, it’s all because of the tariffs. 

On an analyst call on Thursday, Doug McMillon, Walmart’s chief executive, shared that the retailer — America’s largest — could no longer guarantee keeping its prices as low as they have been due to the impacts of the tariffs implemented by President Donald Trump, which have significantly raised the import cost of many goods.

“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,” McMillion shared on the call, according to The New York Times. 

As the Associated Press reported, Walmart posted strong first-quarter earnings, noting that sales rose 3%, reaching $112 billion. And while the brand expects its sales to grow this year, it did not issue a profit outlook for the next quarter due to the “chaotic environment” the tariffs have caused. 

The AP noted that McMillon shared on the call that prices will likely increase gradually rather than all at once, but added that those increases are already happening. McMillon mentioned that imports from China are particularly impactful and represent a large portion of its merchandise, such as electronics and toys. However, he also indicated that the tariffs on Central and South American nations, including Colombia, Peru, and Costa Rica, could result in higher prices for staple grocery items like coffee, avocados, and bananas. Additionally, as the AP noted, McMillon shared that the brand is absorbing some of the costs of certain goods — for now.

Analysts are also viewing Walmart’s transparency in pricing as a sign that many more companies may follow suit.

“If Walmart’s coming out — with its scale and its buying power and its focus — and saying prices are going to rise, everyone else is going to have to follow suit,” Neil Saunders, managing director at retail consultancy GlobalData, shared with NBC. “Walmart is firing the starting gun on a period of price increases.”

The only glimmer of hope here is that the Trump Administration announced it struck a new trade deal with China on Monday, sharing that certain tariffs will go on pause once again for 90 days, and that the import tax on Chinese goods will be reduced to 30%, rather than the 145% Trump initially threatened, according to the AP.

There is also one more glimmer of hope for the economy. John David Rainey, the chief financial officer of Walmart, shared with NBC that the company attracted new customers across all income levels last month, indicating that people are still shopping.

“They’re maybe a little concerned about possible looming price increases,” Rainey said. But added that “their behaviors largely have not changed … They’re still looking for value.”