By Sabrina Escobar

Walmart and Home Depot offered shoppers two very different pictures of how President Donald Trump's new wave of tariffs will affect retail prices. Walmart said the levies would push prices higher, while Home Depot said they would be generally unchanged.

The difference in commentary reflects the tightrope retailers are walking: navigating a higher-tariff environment while coming off the heels of decades-high inflation. While raising prices could help these stores retain profits, it could also anger inflation-weary shoppers.

"It becomes a very challenging decision," said Ali Furman, consumer markets industry leader at PwC. "It isn't just a finance decision, it's a customer-relationship decision. And no retailer wants to be accused as gouging the customer in this current environment."

Days after Walmart's executive team talked about increasing prices, Trump posted on Truth Social that the company should "eat the tariffs," rather than raise prices. It's possible the posts prompted other retailers to take a more nuanced approach when talking about pricing to avoid incurring the president's wrath.

But that might be confusing the many consumers who are already seeking answers for how -- and when -- the new levies will affect their pocketbooks. The diverging answers from two of the country's largest retailers raises the question: Which is it? Are prices going up, or staying the same?

Unfortunately, the answer isn't straightforward. Few retailers -- if any -- will declare a blanket price increase and call it a day. Instead, most will combine pricing increases with a host of other strategies to offset the tariff impact and try to keep prices as low as possible, Furman said. And when they do decide to raise prices, they're going to be deliberate about it.

"You're not just going to peanut butter your pricing strategy across your whole product portfolio," Furman said.

Plus, retailers will have different capabilities to absorb the tariffs based on their business model, reliance on heavily tariffed imports, and supply chain strategy. For instance, home improvement stores like Home Depot will have "more wiggle room" than grocers to keep prices low, wrote Carol Levenson, an analyst at research firm Gimme Credit.

Groceries and other essentials are lower-margin items than appliances and other products sold by home improvement retailers. Home Depot's adjusted operating margin for the fiscal year ended February was 13.5%, while Walmart's was 4.4%.

These factors mean pricing strategies will end up looking different across companies. That said, many approaches will might end up looking a lot like that of Target, which said continually adjusting prices is part of its regular functions.

"We look at competition and we make adjustments literally each and every week," said Target CEO Brian Cornell on a call with media. "So we're constantly adjusting pricing, some are going up, some will be reduced, but that's an ongoing effort that takes place each and every day."

Even Home Depot, which has said it aims to "generally maintain" current pricing levels, expects to see some fluctuation.

"It's common to see some shifts in pricing, which are part of the normal course of business, but it's important to remember that as our customer's advocate for value we manage pricing on a portfolio basis across the store," said Home Depot spokeswoman Beth Marlowe in emailed comments to Barron's.

The so-called portfolio pricing approach considers all of the retailer's product range when setting prices -- rather than pricing each item individually. The goal isn't necessarily to maximize profit on every product. Some, for example, might be priced at a loss to simply drive traffic, and others might be priced higher to protect margins.

That pricing strategy was already on display weeks ahead of Home Depot's earnings. Barron's analyzed weekly pricing data, provided by data company OpenBrand, for seven appliances sold by Home Depot, dating back to the first week of January through early May.

Some prices have remained generally unchanged -- the $129.99 final price tag for a Ninja air fryer has been the same since the week of Jan. 12 through May 11, even though the average price for that air fryer across other retailers has gone up about 4%.

Other appliances, however, have seen big jumps. The shelf price (the list price before any promotions) for an LG front-loading washing machine ticked up about 5% to $1249 the week of May 11 from $1,199 in the first week of January, according to OpenBrand.

The net price (after promotions and any other discounts) of that same washer has fluctuated even more, jumping by about 56% to $1,249 from $798 over that span. A Whirlpool dishwasher's net price rose by 6.4%, on average, in the same time frame.

Whirlpool executives said on the company's April earnings call that the company had "successfully implemented pricing actions" that month to offset higher tariffs on machine parts -- on top of several increases over the past 12 months. LG said it had a "road map" for raising prices in the second quarter.

So, will prices go up? The highly unsatisfying conclusion is, it depends on where you shop, what you're buying, and when you're buying it. Time to fire up those price comparison tools.

Write to Sabrina Escobar at sabrina.escobar@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 24, 2025 03:00 ET (07:00 GMT)

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