U.S. shoppers may have gotten through the summer with less tariff impact than expected, but according to Walmart, the relief won’t last much longer. The world’s largest retailer is cautioning that consumers should brace for more tariff-driven price increases later this year.
Tariffs Begin to Bite
Speaking on Walmart’s quarterly earnings call, CEO Doug McMillon said the impact of tariffs is becoming more pronounced across imported merchandise.
“We’ve continued to see our cost increase each week, which we expect will continue into the third and fourth quarters,” McMillon told investors.
The comments mark a shift from earlier in the year, when Walmart noted that tariff effects were more limited. While the company had warned that tariffs were “too high” and could force price hikes — a statement that drew criticism from then-President Donald Trump — executives said at the time that the actual impact was lower than expected.
Gradual but Growing Increases
CFO John David Rainey noted that during the second quarter, Walmart ultimately faced smaller markups than anticipated, and most of the increases passed on to shoppers were relatively modest. Still, he acknowledged that the burden is gradually building.
Some consumers are already making changes to cope. McMillon said middle- and lower-income households are adjusting their spending more visibly than higher-income shoppers, particularly in discretionary categories such as apparel, home goods, and electronics.
“As always, our customers are aware, smart, and value-conscious,” McMillon added, noting that many are opting for lower-priced alternatives or holding back on purchases altogether.
Sales Still Growing Despite Pressure
Even with the mounting cost pressures, Walmart posted solid results for the quarter. Comparable sales climbed 4.6%, driven by a 1.5% increase in transactions and a 3.1% increase in the average receipt compared to last year.
The company also struck an optimistic note on seasonal demand. Strong back-to-school shopping trends suggest that Walmart is well-positioned heading into the holiday season, typically the retailer’s most critical sales period of the year.
What It Means for Shoppers
For now, Walmart customers have only experienced gradual price increases, but the company’s warning signals more noticeable hikes may arrive this fall. With tariffs continuing to weigh on supply chains, U.S. households — especially those on tighter budgets — are likely to feel the impact in everyday essentials and discretionary purchases alike.
Still, Walmart’s strong sales growth indicates that its reputation for value and convenience remains a powerful draw for shoppers, even in an inflationary and tariff-driven environment.
