{"id":374898,"date":"2025-08-26T12:19:21","date_gmt":"2025-08-26T12:19:21","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/374898\/"},"modified":"2025-08-26T12:19:21","modified_gmt":"2025-08-26T12:19:21","slug":"us-retail-giants-raise-prices-and-seek-new-import-sources-due-to-tariffs-economy-and-business","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/374898\/","title":{"rendered":"US retail giants raise prices and seek new import sources due to tariffs | Economy and Business"},"content":{"rendered":"

Four of the main retail groups in the United States \u2014 including the country\u2019s and the world\u2019s largest, Walmart \u2014 have highlighted in their respective second-quarter earnings presentations the complexities their businesses face due to tariffs imposed by the Trump administration<\/a>. These tariffs have been the main topic of discussion for Walmart, Home Depot, Target, and Lowe\u2019s \u2014 listed retailers that are already feeling, to a greater or lesser extent, the effects of this trade policy.<\/p>\n

As for results, the impacts have been cushioned by the companies\u2019 swift reaction, which involved applying various price increases, as well as activating efforts to achieve greater cost efficiencies. As Walmart\u2019s president and CEO Doug McMillon acknowledged: \u201cWe\u2019ve continued to see our costs increase each week, which we expect will continue into the third and fourth quarters.\u201d Target\u2019s CEO, Brian Cornell, echoed this sentiment: \u201cThe straight cost impact of tariffs will be with us as long as the tariffs are with us.\u201d<\/p>\n

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\u2019s \u2014 and the industry\u2019s \u2014 thin margins. Even U.S. President Donald Trump pressured the company to absorb those expenses against its margins.<\/p>\n

\u201cWe\u2019re doing what we said we would do,\u201d Doug McMillon explained last week. \u201cWe\u2019re keeping our prices as low as we can, for as long as we can,\u201d he added, reflecting the constant pressure on costs that continue to rise. \u201cAs we replenish inventory at post-tariff price levels, we\u2019ve continued to see our costs increase each week, which we expect will continue into the third and fourth quarters.\u201d <\/p>\n

Protecting margins<\/p>\n

According 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 to hold steady and even gain a tenth of a point in gross margin. The same pattern is seen in the second quarter alone: sales grew by 4.75%, while costs rose by 4.7%.<\/p>\n

\u201cWe\u2019re focused on the customer, kind of the fundamentals of the business, whether it\u2019s pricing or inventory management,\u201d McMillan explained. On the latter point, tariffs are also making themselves felt. In Walmart\u2019s case, inventory value rose in the first half of the year by $2.1 billion, up 3.7% from a year earlier, \u201cdue to higher import costs.<\/a>\u201d<\/p>\n

The retail giant clarified that most of its purchases are made in the U.S., while one-third come from abroad \u2014 mainly China, Mexico, Vietnam, India, and Canada. In the case of China, it is facing the looming threat of a 145% tariff, up from the current 30%.<\/p>\n

Diversification of import sources is now a key concern for U.S. retailers. \u201cOur teams have done an incredible job partnering with our vendors to diversify product sourcing,\u201d Home Depot\u2019s executive vice president, Billy Bastek, said last week. \u201cWe will continue to work with our vendors to ensure that we have the right products at the right value in stock.\u201d He specified that 50% of its merchandise is not subject to tariffs since it is sourced within the U.S.<\/p>\n

Home Depot \u2014 the world\u2019s largest home improvement retailer \u2014 acknowledges that there will be \u201cmodest price movements for some categories\u201d because current tariffs \u201care significantly higher than last quarter,\u201d according to Bastek. He also announced a reduction in promotional activity for part of its offerings.<\/p>\n

Like Walmart, Home Depot has fine-tuned its pricing strategy, especially in the second quarter. During that period, its revenues grew 4.86%, while procurement expenses increased 4.84% \u2014 enough to support its margin.<\/p>\n

Exposure to foreign markets<\/p>\n

Two other major U.S. retailers are more exposed to high levels of imports<\/a>. Lowe\u2019s \u2014 which also specializing in home improvement products \u2014 sources 60% of its merchandise outside the U.S., with 20% coming from China. \u201cIt wasn\u2019t that way seven years ago,\u201d said Lowe\u2019s chairman and CEO, Marvin R. Ellison, last week. \u201cWe have done, in my estimation, an excellent job of working cross functionally relative to looking for diversification.\u201d<\/p>\n

Like the rest of the sector, Lowe\u2019s is also applying price increases with a category-specific approach. \u201cSpecific to pricing, we said […] we would be pricing competitive […] That\u2019s what we\u2019re continuing to do,\u201d said Ellison. \u201cPrices in retail will always be dynamic. Your prices will fluctuate up and down through various categories based on competitive responses, internal algorithms.\u201d The company\u2019s sales rose 1.6%, while procurement costs increased by 1% \u2014 another case of protecting margins.<\/p>\n

Target, meanwhile, acknowledged that, \u201cas one of the largest importers in the country, the prospect of higher tariffs meant we were facing some major financial and operational hurdles,\u201d said Cornell, who will step down as CEO next year. The company\u2019s trajectory is further complicated by \u201cmultiple changes in tariff policy that have been announced and implemented as the year has progressed,\u201d he added.<\/p>\n

For this reason, the supermarket chain has adopted various mitigation strategies, including \u201cdiversifying\u201d production and sourcing countries. \u201cWe have many levers to use in mitigating the impact of tariffs, and price is the very last resort,\u201d said Target executive vice president, Rick Gomez, last week.<\/p>\n

The company \u2014 one of the benchmarks in traditional retail \u2014 has posted declining sales for three consecutive years, a trend that continued into the first half of this year. Sales fell 1.9% in that period, though the decline eased to 0.9% in the second quarter. Its inventory rose 2%, \u201creflecting higher product costs than a year ago, driven by tariffs and other pressures.\u201d<\/p>\n

Of the four companies analyzed, Target was the only one whose gross margin worsened in the second quarter. It declined by one percentage point, after merchandise costs increased 0.5% while sales fell 0.9%. The company expects to complete its recovery in 2026.<\/p>\n

Sign up for our weekly newsletter<\/a> to get more English-language news coverage from EL PA\u00cdS USA Edition<\/p>\n","protected":false},"excerpt":{"rendered":"Four of the main retail groups in the United States \u2014 including the country\u2019s and the world\u2019s largest,…\n","protected":false},"author":2,"featured_media":374899,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5311],"tags":[32,49,978,659,19519],"class_list":{"0":"post-374898","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-united-states","8":"tag-donald-trump","9":"tag-united-states","10":"tag-us","11":"tag-usa","12":"tag-walmart"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115095035382640368","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/374898","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=374898"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/374898\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/374899"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=374898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=374898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=374898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}