In This Story
Even Walmart isn’t safe from President Donald Trump’s tariffs, as new costs from suppliers could lead to higher prices for consumers.
The retail giant will soon face price hikes from its own suppliers, raising concerns that consumers might get hit with unfair price gouging.
“Consumers won’t know if things are priced correctly or if they’re getting ripped off,” Errol Schweizer, a grocery industry expert with three decades of experience, told The New York Times (NYT+0.29%) in an interview. As suppliers pass along tariff-related costs, some may take advantage of the situation to raise prices even further, potentially deceiving consumers.
The situation is further complicated because Walmart requires suppliers to notify the company about price changes and provide specific documents. However, some suppliers have yet to set up the systems necessary to comply, the publication added. Walmart (WMT+2.60%) did not immediately respond to Quartz’s request for comment on whether it had started to receive such documents.
Walmart has previously pressured suppliers on multiple occasions to absorb the costs of tariffs, despite being summoned by Chinese officials, who called the company’s demands irresponsible and unfair. Suppliers, citing already razor-thin margins, have pushed back. Other retailers, including Costco and Target, have followed Walmart’s lead, also reportedly demanding that Chinese suppliers absorb the costs of U.S. tariffs.
The retail giant previously told Quartz it was working with its overseas suppliers on a plan to avoid raising prices for consumers.
Now, however, Walmart is facing the likelihood of rising costs. It will need to balance its long-standing pressure on suppliers with the financial strain caused by tariffs. In its most recent earnings report, the company issued a cautious outlook, warning that it didn’t expect to see the massive gains it saw in 2024.
With over 330 locations in mainland China, Walmart’s vast global footprint hasn’t shielded it from the tariffs’ impact.
Walmart CEO Doug McMillon has previously acknowledged that sky-high food prices are pushing lower-income consumers to buy smaller packages.
As tariffs continue to affect retailers, shoppers may soon face higher prices on everyday items such as bananas, grapes, and seafood. While it’s unclear how much of the cost will be passed on to consumers, it’s evident that retailers are searching for ways to mitigate the financial burden.