During America’s inflation crisis, shoppers have rushed to Walmart for groceries and clothing. They are looking for the best deals on all the essentials. But Walmart said that 2025 will be trickier as consumers are becoming frustrated with inflation and concerned about Donald’s tariffs.
Walmart said that its sales and profits would be low this year, sending its stock tumbling around 6%. In its statement, the company said its sales would go up to 4% and the profit would go around 5%. But this is short of investor expectations.
Walmart is the largest retailer in the US and a bellwether for consumer spending. Its project clearly demonstrates that the retail industry will face a tough year in 2025.
Customers earning more than $100,000 a year seeking to save on groceries have accelerated the growth of Walmart in recent years. The company built a robust online operation to compete with the giant e-commerce platform like Amazon. It allows customers to buy online and pick up in-store at those of its locations and Walmart+, a same-day delivery membership program.
Walmart said it will focus on navigating tariffs and overcoming other challenges.
US President Donald Trump recently enacted a 10% across-board tariff on goods from China and 25% tariffs on all steel and aluminum imports. For now, the tariffs are paused on Mexico and Canada until March.
Walmart expects a stable macroeconomic environment but also acknowledges that there are several uncertainties in consumer behavior and global economic and geopolitical conditions.
Walmart is better at handling tariffs than most other companies because it can easily apply its size and scales to reduce costs with suppliers. Smaller companies do not have this leverage and may have to increase the product cost for consumers. The company expects normal inflation this year of 1% to 2%, despite the hike in egg prices.
