Walmart CEO Doug McMillon recently said that the massive global retailer will likely have to raise prices due to tariffs instituted by U.S. President Donald Trump.
In response, Trump said that Walmart should just “eat the tariffs.”
“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,” Trump said on his social media platform Truth Social. “Between Walmart and China they should, as is said, 'EAT THE TARIFFS,' and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!”
Even though the U.S. and China agreed to reduce tariff rates by 115 percent in mid-May, Walmart will still need to pass along higher costs, its executives said.
“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,” McMillon said on a conference call with investors, according to The Street.
“We’re wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb. It’s more than any supplier can absorb. So, I’m concerned that consumers are going to start seeing higher prices,” Walmart CFO John David Rainey said, per CNBC, adding that price hikes will start at the end of May and “much more” in June.
Walmart is not the only U.S. retailer that has expressed concern about tariffs’ impact on prices.
Rochester, New York, U.S.A.-based Wegmans and Williamsville, New York-based Tops placed signs warning of price increases due to tariffs in their produce departments, according to Supermarket News.
“We believe in being transparent in our communication with our customers, so we communicated the information at the point of sale,” a Tops spokesperson told Supermarket News.
The Tops signs in particular explain that a 10 percent tariff on bananas imported from Central and South America has increased costs across the industry, that Tops is working closely with suppliers to manage the changes, and that it remains committed to keeping prices competitive.
Wegmans’ signs indicated that its bananas are imported from Colombia, Honduras, and Costa Rica and that those countries have been levied with 10 percent tariffs. It has since removed the signs, the Buffalo News reported.
The alarm raised by retailers comes as ongoing concern about price hikes from tariffs continues to impact consumer sentiment – but not necessarily spending just yet.
The University of Michigan’s Consumer Sentiment Index dropped to 50.8 in May from a final reading of 52.2 in April, even though economists had forecast the index rising to 53.4, according to Reuters.
Tariffs were spontaneously mentioned by nearly three-quarters of consumers surveyed, up from almost 60 percent in April, University of Michigan Surveys of Consumers Director Joanne Hsu said.
“Uncertainty over trade policy continues to dominate consumers’ thinking about the economy," she said.
As a result, 54 percent of Americans surveyed by Bankrate said they will spend less on dining, travel, or live entertainment this year, and 83 percent of consumers said if their financial situation worsens in the coming months, they will strongly consider cutting back on their non-essential purchases, according to Intuit Credit Karma.
“Moving forward, people may not be able to absorb these higher prices,” Bankrate Senior Industry Analyst Ted Rossman said, per CNBC. “It sort of feels like something has to give.”
However, sales of groceries and non-food items are continuing to grow as consumers stockpiled this spring. Overall retail sales soared 5.2 percent in April compared to April 2024, according to new U.S. Census Bureau data.
Seafood sales also soared in April due to a late Easter holiday this year, while grocery and beverage store sales spiked 9.5 percent in April year over year, according to CNBC/National Retail Federation (NRF) Retail Monitor data.
“Consumers are still spending despite widespread pessimism fueled by rising tariffs,” NRF Chief Economist Jack Kleinhenz said in a press release. “While tariffs may have weighed on spending decisions, growth is coming at a moderate pace, and consumer spending remains steady, reflecting a resilient economy.”
Though Walmart has announced it will likely raise prices, it reported U.S. comparable store sales growth of 4.5 percent in its fiscal year 2026 first quarter, along with a 7.8 percent comparable store sales growth for Walmart International and a 6.7 percent hike for Sam’s Club.
The retailer forecast its sales to grow 3 percent to 4 percent for its fiscal year, which remains unchanged from its forecast earlier this year.
