US retail giants raise prices due to tariffs

Summary

Four of the main retail groups in the United States — including the country’s and the world’s largest, Walmart — have highlighted in their respective second-quarter earnings presentations the complexities their businesses face due to tariffs imposed by the Trump administration. These tariffs have been the main topic of discussion for Walmart, Home Depot, Target, and Lowe’s — listed retailers that are already feeling, to a greater or lesser extent, the effects of this trade policy.As for results, the impacts have been cushioned by the companies’ swift reaction, which involved applying various price increases, as well as activating efforts to achieve greater cost efficiencies. As Walmart’s president and CEO Doug McMillon acknowledged: “We’ve continued to see our costs increase each week, which we expect will continue into the third and fourth quarters.” Target’s CEO, Brian Cornell, echoed this sentiment: “The straight cost impact of tariffs will be with us as long as the tariffs are with us.”All eyes were on Walmart. The global retail giant had already warned, in its first-quarter earnings release, that it could not absorb all the cost pressures resulting from tariffs, given the company’s — and the industry’s — thin margins. Even U.S. President Donald Trump pressured the company to absorb those expenses against its margins.“We’re doing what we said we would do,” Doug McMillon explained last week. “We’re keeping our prices as low as we can, for as long as we can,” he added, reflecting the constant pressure on costs that continue to rise. “As we replenish inventory at post-tariff price levels, we’ve continued to see our costs increase each week, which we expect will continue into the third and fourth quarters.” Protecting marginsAccording to its financial disclosures, Walmart has acted surgically on its pricing to protect its margins. The group increased its revenues in the first half of the year by 3.7%, compared with a 3.6% increase in procurement costs, allowing it t...