Walmart has warned that it may raise prices later this year if elevated fuel costs do not ease, after absorbing a sharp jump in transportation and energy expenses that has already weighed on its quarterly profits.
In its latest earnings update this week, the retailer said it took an estimated $175 million hit last quarter as it chose to shoulder higher fuel-related costs rather than pass them on to shoppers.
Chief Financial Officer John David Rainey told analysts that Walmart is now facing "hundreds of millions" of dollars in additional energy and transportation expenses over the course of the year. If fuel prices stay high, he said, the company will have to consider selective price increases on goods moving through its supply chain, according to Business Insider.
Rainey noted in a CNBC interview that rising fuel prices are beginning to squeeze both Walmart and its customers, particularly as earlier tax refunds that supported spending have largely run their course.
He said the company is watching fuel markets closely and will try to limit any price adjustments, but emphasized that there is a threshold beyond which Walmart cannot continue to absorb the higher costs.
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The retailer is the largest private employer in the U.S. and a major seller of groceries and household essentials, making any price changes significant for millions of households, the Associated Press reported.
Higher fuel prices increase the cost of moving goods by truck, ship, and delivery van, a burden that ultimately feeds into retail prices across the industry. Logistics experts say elevated fuel surcharges on freight and last‑mile delivery can push up shelf prices, especially at discount chains that operate with thin margins.
Walmart has been trying to offset some of the pressure by using its scale to negotiate shipping, improve routing, and manage inventory more efficiently, while also leaning on growth in e‑commerce, advertising, and membership revenue to support profit.
Executives stressed they are prioritizing value for shoppers but cautioned that persistent high fuel costs would leave them with fewer options to avoid passing on at least part of those expenses, as per NBC News.
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