Walmart CEO says ‘there will be a Christmas’ despite lingering fears of a trade war
Despite the midday decision on Wednesday by president Donald Trump to stop most of his controversial rise, the risks to retailers are still very present that duties can be imposed again within a few months. This only withdraws the uncertainty about how these companies work, even when you start planning to buy for the holiday season.
But Doug McMelon, CEO of Walmart Inc, told investors that the largest fragmentation in the world has moved to many periods of uncertainty before, including the high tariffs in 2018 and increased inflation after birth. He assured them that the company has a strategy to move forward.
“We have an implementation plan. There will be a birthday, people will celebrate Christmas, they will buy items, and we will sell these elements,” McMelon said at a press conference at the end of the company’s 2025 investor day in Dallas.
These plans include maintaining a strong stock and stored shelves despite the incremunition. This is partially possible due to Walmart’s influence with sellers, which allows the company to absorb a large part of any cost increase. McMelon said: “Some of the confidence we express is already: We know who these buyers are.” “They have great tools to manage this long -term suppliers, and we think it will be well.”
The retail seller is certainly moving on a difficult road. Although the main groceries import only a third of what you sell, China is the largest source of this stock. China was not included in the Trump tariff – in fact, the country was distinguished for a higher tariff. This means that Walmart is still at risk of higher duties to honor its products.
But McMillon, who was buying for years in Walmart and Sam’s Club, said that high tariffs can be managed by the presence of products of higher importance of margin and low prices. In other words, the high costs caused by customs tariffs can be met at a higher price imposed on a low -flexible element in prices, or elements whose demand is not particularly sensitive to prices.
The company also has a great advantage over many competitors is that many of its goods can be renewed. This means that it does not carry the same potential risks of forcing the removal of seasonal goods that are not sold for other retailers. Instead, it can stop asking for a new inventory, or reducing the size, if the demand is relieved.
“Now, our traders are thinking about quantities,” McMelon said. But it was clear that the company “has not canceled anything yet.”
This story was originally appeared on Fortune.com
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2025-04-09 22:34:00
