Retail

China Tariffs Will Cause Price Hike At Walmart

China Tariffs Will Cause Price Hike At Walmart

Walmart’s prices will rise due to the ongoing trade war between the U.S. and China, according to a report by Reuters.

The company shared the news that tariffs on goods will have that effect. The news comes as the retailer has seen its best comparable sales growth in nine years with Q1 results. Shares in the company have grown 7 percent this year, and they went up another 4 percent in early trading, to $103.84.

Walmart Chief Financial Officer Brett Biggs said the increased tariffs will cause prices to rise, and that the company will try to make it easier on consumers by attempting to get products from other countries and working with suppliers’ “costs structures to manage higher tariffs.”

Walmart’s grocery division is about 56 percent of its overall revenue, and Moody’s Analyst Charlie O’Shea said the tariffs are limited by its food business. “We believe Walmart has the wherewithal, both financially and via its vendor relationships, to minimize the impact on both itself and its shopping base,” he said.

Greg Foran, Walmart’s U.S. chief executive officer, said the retail giant is going to keep its “low-price leadership” and try to “manage costs on an item-by-item basis.”

Walmart is getting hit from many sides, with more competition from upstarts like ALDI and vendors like Del Monte Foods, which provides the retailer with items like mandarin oranges from China and is raising its prices as well.

“It’s not just tariffs. Transportation costs are up, labor costs are up. It’s an inflationary environment,” said Del Monte CEO Greg Longstreet. “A lot of that’s going to have to be passed on. The consumer is going to have to pay more for a lot of critical goods.”

Biggs said despite the complications, he hasn’t seen any signs of a slowdown in consumer spending habits, which analysts and investors are predicting will happen eventually due to tariffs, debt and a slowing economy.

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