Walmart CEO Doug McMillon told investors on Thursday that his company is preparing to raise prices on items, saying it is not able to absorb all of the costs associated with tariffs implemented by President Donald Trump.
McMillon indicated that Walmart began experiencing increased costs in late April due to tariffs, with those costs substantially increasing in the first two weeks of May. He said customers could notice price increases on a broad range of items, even after President Trump reduced the tariff rate he imposed on China from 145% to 30%.
"I wanna thank President Trump and Secretary Bessent for the progress made recently," McMillon said. "We're hopeful that it leads to a longer-term agreement between the U.S. and China that would result in even lower tariffs."
"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."
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McMillon said his company has been buying more domestic products in recent years, but a shift to relying on U.S.-made goods would take time and resources.
Currently, the U.S. has imposed a 10% tariff on most imported goods, a 25% duty on aluminum and steel products, in addition to the 30% tax on Chinese goods. Those tariffs are charged to companies importing the items.
Many companies, including Walmart, said some of those costs will be passed on to consumers.
Much of the produce that Walmart sells, McMillon said, is subject to tariffs. He recognized rising food costs even before tariffs were implemented.
"We won't let tariff-related cost pressure on some general merchandise items put pressure on food prices, but as it relates to food, tariffs on countries like Costa Rica, Peru, and Colombia are pressuring imported items like bananas, avocados, coffee, and roses," he said. "We'll do our best to control what we can control in order to keep food prices as low as possible."
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One strategy Walmart might employ is raising prices on some non-tariffed goods.
"In some cases, we'll absorb costs within a category or department and not simply pass on a tariff cost attributable to each item individually," he said. "We'll be managing mix across items, categories, and businesses."
