Trump Tariffs: Walmart says it will hike some prices; CEO Doug McMillon says realities of higher costs began to hit Walmart in ...

Shoppers at Walmart should brace for price increases on a wide range of goods in the near future, the company's Chief Financial Officer John David Rainey has warned, according to a CNBC interview. Despite a recent 90-day reprieve that lowered duties on Chinese imports to 30%, tariffs on goods from numerous other countries are set to impact the retail giant known for its low prices. "We’re trying to navigate this the best that we can," Rainey told CNBC on Thursday. "But this is a little bit unprecedented in terms of the speed and magnitude in which the price increases are coming."

Timeline for Price Increase at Walmart
Rainey indicated that consumers will likely start seeing price increases towards the end of May, with more significant markups expected in June.
He also predicted a higher-than-usual number of price increases in the fiscal second quarter, which began earlier this month.
Impact Across Retail Landscape:

As the largest retailer and grocer in the U.S., Walmart's announcement offers a significant insight into potential price hikes that shoppers may encounter at various stores and chains nationwide.

Which Items Will Likely Be Affected
Walmart CEO Doug McMillon shed light on specific product categories during the company’s earnings call, as reported by CNBC. While about a third of Walmart's U.S. sales come from domestically produced goods, the company relies heavily on imports from countries including China, Mexico, Vietnam, India, and Canada.

Direct Tariff Impact: Tariffs on countries like Costa Rica, Peru, and Colombia have already put pressure on the prices of imported items such as bananas, avocados, coffee, and roses.

China-Sourced Goods: McMillon noted that a high volume of merchandise in categories like toys and electronics originates from China, making them particularly susceptible to tariff fluctuations.

Neither McMillon nor Rainey specified the exact amount by which prices would increase for consumers or how much of the tariff costs would be absorbed by Walmart or its suppliers.

When Walmart Saw Signs of Rising Costs
McMillon told CNBC that the realities of higher import costs began to affect Walmart in April, as the company imported items for the upcoming back-to-school season. Tariffs are applied when goods clear customs, meaning some imports have already been subject to higher duties, including the previously imposed 145% levy on Chinese goods before the temporary reduction.

"What we’re looking at is upward pressure began in April and placed through the entire year on things that are imported," McMillon stated.

CNBC's report detailed the challenges retailers and consumer brands face in managing inventory and maintaining business targets amid fluctuating tariff levels. The recent dramatic swing from a potential 145% tariff on Chinese goods to the current 30% illustrates this volatility.

Walmart's Strategies to Mitigate Trump Tariff Impact
McMillon told CNBC that Walmart is employing several strategies beyond price increases to lessen the impact of tariffs:

* Material Substitution: Suppliers are shifting away from materials facing tariffs, such as aluminum, to alternatives like fiberglass.

* Sourcing Diversification: Merchants are exploring alternative products or countries to source merchandise.

* Order Adjustments: Rainey noted that Walmart has reduced the size of orders for items expected to see significant tariff-related price increases due to anticipated lower customer demand.

How is the Sales Outlook
Interestingly, despite the impending price increases, Walmart has maintained its full-year sales forecast, even after slightly missing Wall Street's quarterly revenue expectations, according to CNBC. The company anticipates that its reputation for low prices could ironically attract more shoppers to its stores and website as competitors also face similar tariff pressures.