Walmart CEO Discusses Impact of Tariffs on Consumer Behavior

As the year progresses, consumers are likely to feel the effects of tariffs on their wallets, leading to an inflationary environment and increased uncertainty among shoppers. Doug McMillon, the president and CEO of Walmart, shared insights on this topic during the Goldman Sachs Global Retailing Conference.

Consumer Response to Tariffs

McMillon noted that while middle to upper-income consumers are showing strong demand, those in the middle to lower income brackets are experiencing some financial stress. As a result of tariffs, consumers are changing their shopping behavior by switching to alternative products when prices increase.

Despite these challenges, Walmart reported consistent shopping behavior among consumers in their recent quarterly results. While there have been no significant shifts in response to tariffs, consumers are feeling the pressure of rising prices.

Walmart’s Performance and Response

In the second quarter of fiscal year 2026, Walmart saw a 4.8% increase in net sales in the US, driven by growth in grocery and health-and-wellness categories, as well as a significant jump in e-commerce sales. Comparable sales excluding fuel rose by 4.6%, with an increase in both average ticket size and transaction count. Walmart has maintained its value proposition through price rollbacks, with a focus on providing affordable options for shoppers.

McMillon highlighted the impact of inflation on food and general merchandise prices, noting that pricing levels are higher than desired. Despite these challenges, Walmart has seen better-than-expected price elasticity, with consumers adjusting their purchasing habits in response to price changes.

Outlook and Forecast

Looking ahead, Walmart has increased its adjusted earnings-per-share estimates for the year and raised its net sales growth forecast. McMillon anticipates that cost pressures resulting from tariffs will continue to impact the retail industry in the coming year.

Tariffs remain a key factor in determining consumer response to pricing actions. McMillon emphasized the importance of reaching a resolution on tariffs to minimize the impact on consumers. Walmart is taking steps to manage price increases by spreading costs across categories and products.

Overall, Walmart is focused on maintaining consistency and providing value to customers in the face of economic challenges. By adapting to changing market conditions and consumer behavior, the retail giant aims to navigate the impact of tariffs and inflation in the coming months.