Walmart, which became the nation's largest retailer by making low prices a priority, has found itself in a place it's rarely been: Warning customers that prices will rise for goods ranging from bananas to car seats.
Executives at the $750 billion company told industry analysts that they're doing everything in their power to absorb the higher costs from tariffs ordered by President Donald Trump.
Trump's threatened 145% import taxes on Chinese goods were reduced to 30% in a deal announced Monday, with some of the higher tariffs on pause for 90 days.
Given the magnitude of the duties, however, the highest since the 1930s, higher prices are unavoidable, and they will hurt Walmart customers already buffeted by inflation over the past three years.
"We're wired to keep prices low, but there's a limit to what we can bear, or any retailer for that matter," Chief Financial Officer John David Rainey said Thursday after the company reported strong first-quarter sales.
Rainey said that prices are rising not just for discretionary items such as patio furniture and trendy fashions, but for basic necessities as well. The price of bananas, imported from Costa Rica, rose from 50 cents per pound, to 54 cents. He thinks car seats made in China that currently sell for $350 at Walmart will likely cost customers another $100.
Some higher prices began to appear in late April and accelerated this month, Walmart executives said. However, a larger sting will start to be felt in June and July when the back-to-school shopping season goes into high gear.
Also on Thursday, federal economists reported sales at retail stores and restaurants rose just 0.1% in April from March. That is much lower than the previous month's 1.7% gain, according to the Commerce Department.