Trump tariffs affect Walmart prices

SECAUCUS, N.J. — As customers walk the aisles of Walmart stores, there are some early signs that higher tariffs are changing pricing.

The nation’s largest retailer warned in May that it would have to raise prices for its shoppers as President Donald Trump’s new duties drive up the cost of many imported goods. About two months later, some household items on Walmart’s shelves have higher prices, according to a CNBC analysis.

CNBC tracked prices of about 50 products across merchandise categories including apparel, electronics, toys and groceries over seven weeks at Walmart’s Secaucus, New Jersey, location. About a dozen of the items CNBC followed increased in price during that time, including a frying pan, a pair of jeans and a car seat, according to the analysis. Many of those items are manufactured in countries that face significant tariff rates. Even in cases where prices on imported items increased, it’s unclear if the moves were all or partly due to cost increases from tariffs.

The price analysis offers a snapshot into what Trump’s duties mean for consumers’ wallets, a key concern since he started rolling out tariffs on dozens of U.S. trading partners earlier this year. While nationwide inflation data had seen a muted effect from tariffs in recent months, that showed some signs of changing in June. Though the consumer price index increased by 0.3% for the month and 2.7% year over year, the prices of tariff-sensitive segments like apparel and household furnishings rose at higher rates of 0.4% and 1%, respectively, from May.

Walmart is a critical indicator of pricing trends for multiple reasons. It’s the largest retailer in the U.S., a place where millions of Americans buy not only their regular groceries but also purchase furniture, shoes and other general items. It also explicitly warned that the tariffs were so high, it would be forced to raise prices.

“We’re wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb,” Chief Financial Officer John David Rainey said in an interview with CNBC. The discounter’s comment sparked criticism from the White House, with Trump telling the company in a social media post to “EAT THE TARIFFS.”

Walmart is a single company. The store where CNBC tracked prices is one among more than 4,500 locations across the U.S., and its suppliers play a role in whether prices rise. Even so, the areas where CNBC saw price hikes at Walmart in many cases reflected trends in national data tracked by the government and research firms.

It isn’t just Walmart. Other retailers said this spring that they have raised or expect to hike prices, including Best Buy, Costco, Nike and E.l.f. Beauty.

In a statement, Walmart said “pricing fluctuations are a normal course of business and are influenced by a variety of factors.”

“We’re committed to keeping prices as low as possible for as long as possible, including the over 6,500 rollbacks we’re currently offering, in addition to managing inventory and reducing cost,” its statement said.

Most of the items that CNBC tracked at Walmart stayed the same price. However, some products saw a noticeable increase.

The price of a 12-piece set of pots and pans from Beautiful, a private-label kitchenware brand that’s exclusive to Walmart and co-founded by Drew Barrymore, rose from $99 to $149. A 12-inch frying pan from Beautiful climbed from $24.97 to $31.97.

In addition, the price of a Graco convertible stroller and car seat increased in price from $199.99 (then noted as a Walmart rollback, or limited-time discount from the $249 original price) to $299.

Some items’ packaging offered clues that tariffs could play a role in the hikes. The Beautiful pots and pans and Graco car seat are all made in China, according to labels on their packaging. Trump has put new 30% tariffs on goods imported from the country this year.

Graco’s parent company, Newell Brands, declined to comment on the price increase at Walmart. In its earnings call in late April, the company, which also owns Yankee Candle, Rubbermaid and other brands, said it has raised prices on its baby gear by about 20%. Most baby gear sold in the U.S. is made in China.

The price of Levi Strauss Signature Jeans for Men increased by a dollar from $23.98 to $24.98 at the Secaucus Walmart, bringing it in line with the cost of similar women’s jeans.

On an earnings call in July, the company said it is absorbing some of the tariff costs and anticipates new duties will impact the business by $25 million to $30 million for the rest of the year, or 2 to 3 cents on earnings per share. 

Levi’s CFO, Harmit Singh, told CNBC in an interview that most of Levi’s goods come from countries like Pakistan, Bangladesh and Indonesia. Goods from all of those countries currently face 10% tariffs, and Trump has proposed higher rates for some of those nations as of Aug. 1.

Tags of the signature jeans sold by Walmart, which came in multiple styles and washes, said they were made in Pakistan, Bangladesh, Tanzania and Lesotho.

Across retailers, prices have increased in some key categories, but their impact hasn’t been as dramatic as some feared when Trump implemented new tariffs, said Marshal Cohen, chief retail advisor for Circana, a market research company that tracks consumer spending patterns across merchandise categories. Those items with elevated prices include coats and jackets, casual shorts, golf shirts, plush toys, and small household appliances, he said.

Here’s how much prices rose in some categories as of the week ended May 31, relative to the week ended March 8, according to Circana data:

• Juvenile products, cribs and furniture: +23 to 27%
• Polo or golf shirts: +21%
• Plush toys: +19%
• Casual dinnerware: +23%
• Electric toothbrushes: +12%
• Televisions: +12%

Despite some price pressures, consumer spending has held up, Cohen said. Unit sales of food and beverage at retailers are roughly flat in terms of units so far this year, according to Circana’s data that runs through July 5 and compares with the year-ago period. Sales of discretionary general merchandise or nonfood items are down by about 1% in units compared with the year-ago period, the firm found.

Early imports and supply chain strategies have helped retailers and brands tamp down on the number and magnitude of tariff-related price increases, said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, a major industry trade group. He said many retailers imported goods early after hearing Trump’s plans for tariffs on the campaign trail. And he said companies have used U.S. Customs-sanctioned foreign trade zones and so-called bonded warehouses to store goods duty-free until they head to shelves, in the hopes that the tariff rate may fall.

Gold added companies are trying to predict if tariffs may go up or down, which will factor into their costs and their pricing decisions. Tariff levels have remained in flux as Trump delays some duties and announces others.

“Companies are just kind of scratching their heads trying to figure it out,” Gold said.

However, there were price decreases at Walmart, too: Mattel-owned Barbie Swim dolls dropped in price from $7.97 to to $5.97. The Barbies are made in Indonesia, according to their packaging. Mattel did not respond to a request about the reasons behind the price drop.

Dolls, including Barbies, are one of the items that have come up in tariff policy debates after Mattel said it may have to raise prices. Trump said that American children “could be very happy” with fewer dolls under his trade proposals.

Tariffs aren’t the only dynamic driving prices, however. Some items that are not imported increased or decreased in price, too.

Eggs prices dropped at Walmart. A dozen large eggs from Walmart’s Great Value brand dropped in price from $3.47 to $2.72. They show how factors outside of tariffs are affecting consumers’ wallets, since egg prices have risen and more recently fallen after an avian flu outbreak spread and then eased.

The price of gallons of Walmart’s Great Value milk also rose. And several brands in Walmart’s coffee aisle, including its Great Value Donut Shop brand, increased in price.

Coffee has been vulnerable to price rises because of droughts and frost hitting the global coffee supply. On top of that, some of the top suppliers of coffee could face steep tariffs. Trump recently proposed a 50% duty on Brazil, the largest U.S. supplier of green coffee beans and the source for about a third of the country’s total supply, according to data from the U.S. Department of Agriculture.

The cost of a 40.3-ounce container of Folgers coffee climbed from $16.43 to $19.24 at the Secaucus Walmart during the time CNBC tracked prices.

J.M. Smucker, which owns coffee brands including Dunkin Donuts and Folgers, did not respond to a request for comment. On an earnings call in June, however, the company told investors that tariffs on coffee were weighing on its profits. Coffee accounts for roughly a third of J.M. Smucker’s revenue.

Circana’s Cohen said some brands have phased in price increases, hiking them by a more tolerable level of no more than 10% to 12% or focusing on infrequent purchases.

While tariff-related price jumps haven’t been as noticeable yet, Cohen said he expects more meaningful increases to come in the upcoming months. He said consumers may feel more of the pinch during the holiday season, since many Christmas decorations and toys are made in China or other parts of Asia.

— CNBC’s Amelia Lucas contributed to this report.