Walmart confirms the worst fears in the US and Costco is already celebrating

In recent months, one of the retail giants has tried to keep steady amid an increasingly tense economic environment, we're talking about Walmart. Warnings have piled up, but the problems keep growing for the largest retailer in the U.S. Now, the consequences are starting to be felt more strongly.

Walmart has confirmed what many feared: price hikes, drops in consumption, and a boycott that threatens to seriously affect its sales. Meanwhile, competitors like Costco see this situation as an opportunity to attract discontented consumers.

Price hikes and a national boycott underway

Walmart has warned that it won't be able to fully absorb the costs resulting from the tariffs imposed by Donald Trump's administration. Despite recent attempts to reduce those tariffs, the company confirmed in an earnings call that it will be forced to raise prices.

"We'll do everything we can to keep our prices as low as we can," explained Doug McMillon, CEO of Walmart, during the earnings call. "But given the magnitude of the tariffs, even at the reduced levels announced this week, we can't absorb all the pressure."

The tariffs affect imports from more than 60 countries, which has raised concerns among consumers, especially those with lower incomes, according to The Street. For Walmart, which already operates with very narrow profit margins, this situation is especially critical. The company fears that the price increase could drive away its regular clientele.

Adding to this context is a new national boycott organized by The People's Union USA. The protest, which began on May 20 and will last until the 26th, urges not to shop at Walmart or any of its subsidiaries like Sam's Club.

According to John Schwarz, founder of the group, "we've seen prices go up while wages stay the same. These companies keep making millions while families can barely fill the fridge," he states in an Instagram post.

Drop in visits and weakening consumption

The boycott comes at a time when traffic in Walmart stores was already showing signs of weakness. Data from Placer ai indicate that, during the first months of the year, the number of visits fell by 2.4% compared to the previous year. In February, the drop was 5.9% and in March 4%, only in April was there a recovery, with an increase of 4.5% due to Easter month shopping.

Although Walmart recorded revenues of 5.7 billion euros ($5,700 million) in the first quarter of the year, 7% more than in the same period of 2024, consumption patterns are changing. McMillon himself admitted that while sales in health and wellness grew in "high double digits," those of general merchandise fell. Highlighting a weakness in categories like electronics, home goods, and sports.

The People's Union USA has announced that it will continue with its "economic blackouts" campaigns against large corporations, their next targets will be Target and McDonald's. "We're using the only tool that always makes them listen: money," they state on their website. "If they raise prices, we stop spending, if they ignore our voices, we cut their profits."