Walmart’s Chief Financial Officer, John David Rainey, has indicated that the retailer might be forced to raise prices on certain products if President-elect Donald Trump’s proposed tariffs are implemented. In an interview with CNBC on Tuesday, Rainey emphasized Walmart’s commitment to maintaining low prices but acknowledged that the tariffs could lead to price increases for consumers.
Impact of Proposed Tariffs on Retail Prices
“We never want to raise prices,” Rainey stated, reiterating Walmart’s business model focused on everyday low prices. “But there probably will be cases where prices will go up for consumers.” However, he noted that it’s still uncertain which products might be affected by the potential tariffs.
Retail Concerns Amidst Strong Earnings
Rainey’s comments came as Walmart surpassed Wall Street’s earnings and sales projections and raised its full-year forecast. Similarly, Lowe’s also addressed the possible impact of Trump’s tariff proposal during its earnings call. Lowe’s CFO, Brandon Sink, mentioned that around 40% of the company’s cost of goods sold is tied to imports, stating that tariffs “certainly would add product costs,” though the exact timing and details remain unclear.
Preparations and Industry Reactions
Lowe’s CEO, Marvin Ellison, shared that the company is already in discussions with suppliers to strategize around potential tariff implications. “We’re not waiting to act,” Ellison said, highlighting that contingency plans are in place.
The National Retail Federation (NRF) also expressed concern earlier this month, with CEO Matthew Shay calling the proposed tariffs “a tax on American families” that could spur inflation, increase prices, and lead to job losses.
Broader Industry Implications
Other companies, including E.l.f. Beauty and Steve Madden, have voiced their concerns. E.l.f. Beauty’s CEO, Tarang Amin, mentioned the potential for price increases if higher duties are imposed. Steve Madden has already planned to reduce its imports from China by up to 45% in an attempt to mitigate financial impacts.
Walmart’s Strategy and Resilience
Rainey pointed out that about two-thirds of Walmart’s products are sourced from within the U.S., minimizing the overall impact of tariffs. He added that Walmart has diversified its import sources to reduce dependency on China, a strategy that began during Trump’s first administration.
“We’ve been living under a tariff environment for seven years, so we’re pretty familiar with that,” Rainey said. He underscored that tariffs tend to be inflationary for customers and emphasized Walmart’s ongoing efforts to collaborate with suppliers and focus on private brand assortments to help keep prices down.
