Walmart Warns of Price Hikes 💵

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Walmart Warns It Will Raise Prices Due to Tariffs

Walmart, the country’s retail heavyweight, is warning that tariffs will push prices up. The retail giant said it will begin raising prices later this month as Trump’s trade policies inflate import costs across categories. Electronics, toys, and some food items from China, Costa Rica, Peru, and Colombia are all affected.

“The higher tariffs will result in higher prices,” said CEO Doug McMillon, calling even the reduced tariff levels “too high” for a low-margin business like Walmart to fully absorb. CFO John David Rainey added that consumers will feel the real impact by June, as supply chain costs ripple through.

Analysts say Walmart’s vast supplier network, lower exposure to Chinese imports (just 15% of its products), and heavy domestic sourcing give it an edge. Still, the company warned that persistent trade uncertainty is making short-term planning difficult, and price hikes are now inevitable.

Dick’s Sporting Goods to Acquire Foot Locker for $2.4 Billion

Dick’s Sporting Goods announced plans to acquire rival Foot Locker in a $2.4 billion deal aimed at expanding its global footprint and strengthening its hold on the Nike sneaker market.

The offer gives Foot Locker shareholders the option of $24 per share in cash—a 66% premium over the stock’s 60-day average—or a portion of Dick’s Sporting Goods stock. The acquisition is part of the company’s strategy to reach younger, urban consumers and boost international exposure through Foot Locker’s 2,400 stores across 20 countries.

Despite being longtime competitors, Dick’s Sporting Goods and Foot Locker will now operate under one umbrella, with Foot Locker continuing as a standalone business unit. Dick’s Sporting Goods, which posted $13.4 billion in revenue last year—nearly double Foot Locker’s $8 billion—plans to preserve Foot Locker’s existing brands, including WSS, Champs, and atmos. CEO Mary Dillon said the deal will help elevate the customer experience and further grow sneaker culture across markets.

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TLDR 🗓️

Tariffs Drag Down April Retail Sales

U.S. retail sales barely rose in April, climbing just 0.1% after a 1.7% jump in March, as consumers pulled back following a pre-tariff buying spree. Shoppers had rushed to make purchases ahead of President Trump’s broad tariff hikes, but the momentum faded last month. Categories like gasoline, auto parts, and department stores saw sales slip, while bars and restaurants posted a modest gain of 1.2%.

Analysts say the slowdown reflects both tariff-driven uncertainty and early signs of consumer fatigue. Though the U.S. and China recently agreed to lower some trade barriers, the temporary truce hasn’t reversed the dampening effect on demand.

Key takeaways from Walmart’s Q1 FY26 Earnings Report

✅ Revenue rose 2.5% in Q1 FY26 (4.0% in constant currency), with operating income up 4.3%

✅ Global eCommerce grew 22%, driven by store-fulfilled pickup, delivery, and marketplace sales

✅ Walmart U.S. eCommerce grew 21% and turned a profit for the first time

✅ Sam’s Club eCommerce grew 27%, with over 50% of members transacting digitally

✅ Comparable sales rose 4.5% at Walmart U.S. and 6.7% at Sam’s Club (excluding fuel)

✅ Walmart International net sales increased 7.8% in constant currency

✅ Membership fee income rose 14.8%, led by Walmart+ and a 40% growth at Sam’s Club China

✅ Global advertising revenue jumped 50%, with Walmart Connect up 31%

✅ Same-day delivery is on track to cover 95% of U.S. households by the end of FY26

China’s Retail Sales Growth Slows to 5.1% in April, Missing Expectations

According to the National Bureau of Statistics, China’s retail sales rose 5.1% in April, falling short of analysts’ forecasts for 5.5% growth and down from 5.9% in March. The slower growth underscores persistent concerns around domestic consumption, even as industrial output rose 6.1% year-on-year, beating expectations but easing from the previous month’s 7.7% increase. Fixed-asset investment rose 4.0% in the first four months, but real estate investment dragged, dropping 10.3% year-to-date.

Nike CEO Shakes Up Leadership Amid Falling Sales

Nike CEO Elliott Hill announced major leadership changes just six months into the role, replacing President Heidi O’Neill, who is retiring after 26 years, with longtime Nike executive Amy Montagne.

Hill also restructured the organization, splitting the president’s duties and giving himself more direct control over product, marketing, and growth functions. The shake-up comes as Nike struggles to regain momentum: Q3 revenue fell 9% to $11.3 billion, and the stock is down nearly 30% since Hill took over. The change comes at a time when the brand grapples with both performance pressure and ongoing reputational challenges.

Amazon to Limit Seller-Fulfilled Prime Volumes for Low-Activity Sellers

Starting June 29, 2025, Amazon will cap daily Prime order volumes for sellers enrolled in Seller Fulfilled Prime (SFP) who don’t consistently ship at least 100 Prime packages per month. The move is aimed at ensuring only sellers with proven operational capacity maintain full access to Prime traffic. Falling below the threshold won’t remove sellers from SFP, but it will trigger volume limits until consistency is demonstrated.

The policy is part of a broader overhaul of SFP and Premium Shipping programs, which also includes:

• A three-trial limit per calendar year for new SFP enrollments

• No SFP graduations during peak events like Prime Day or Black Friday

• OTDR (On-Time Delivery Rate) protection for sellers using Amazon’s shipping automation tools

• Penalties for misclassifying product size tiers to game fees

• A two-week appeal window for SFP removals with specific documentation required

Amazon says the changes are based on performance data and seller feedback and are designed to protect the integrity of the Prime badge while giving serious sellers the tools to scale.

Kroger Overcharging Shoppers Due to Expired Price Tags

An investigation by Consumer Reports, The Guardian, and the Food & Environment Reporting Network found that Kroger shoppers are often being charged more than the advertised shelf price due to outdated discount labels.

The review, which looked at 26 Kroger and Kroger-owned stores across 14 states and Washington, D.C., found over 150 items with expired sale tags — some by over 90 days. On average, customers were overcharged $1.70 per item, or about 18.4% more than advertised.

The report links the issue to staffing shortages, as the number of employees and total hours worked have dropped at these stores since 2019. While Kroger denies it has cut staffing or lowered pricing standards, it faces growing customer complaints and multiple lawsuits over pricing accuracy.

Shein Cuts Prices as U.S.–China Tariffs Temporarily Ease

Fast-fashion giant Shein has reduced prices for U.S. customers after a temporary U.S.–China trade agreement eased tariffs on Chinese imports. In a statement to shoppers, Shein announced broader summer discounts and clarified that no surprise import fees would be added at checkout.

The price drop follows a 90-day tariff rollback, effective May 14, which cut duties on Chinese goods from 145% to 30%, and lowered de minimis shipment tariffs from 120% to 54%. Shein, which heavily relies on direct-to-consumer shipments from China, had raised prices and slashed ad spending earlier this month after the U.S. closed the de minimis loophole. The rollback is expected to provide short-term relief for Shein and Temu, which also appear to be re-listing non-local goods on their sites.

Walmart Ordered to Pay $222 Million in Trade Secret Case

An Arkansas federal jury has ordered Walmart to pay $222 million to Zest Labs over claims the retailer willfully stole trade secrets related to technology that extends the shelf life of produce. The jury found Walmart’s actions “willful and malicious,” awarding $72.7M in damages and $150 million in exemplary damages.

Zest Labs demonstrated its Zest Fresh system, which tracks produce freshness and reduces food waste by up to 33%, under a confidentiality agreement in 2014. The company alleges Walmart used the information to build its own Eden platform and later patented the tech without attribution. Walmart denies the claims and plans to appeal, calling the case compromised by Zest’s "unethical behavior."

Zest called the ruling a win for small businesses defending innovation against corporate misuse.

American Eagle Pulls Guidance, Takes $75M Hit on Inventory

American Eagle Outfitters has withdrawn its full-year 2025 forecast after reporting weak Q1 results, including a 5% revenue drop to $1.1 billion and a projected $85 million operating loss. The company took a $75 million write-down on unsold spring and summer merchandise and closed two fulfillment centers. Comparable sales fell 3%, including a 4% decline at Aerie.

CEO Jay Schottenstein cited poor merchandising execution and excess inventory as the main culprits, but said Q2 inventory is now better aligned to demand. The company is also reassessing forward plans amid continued macro uncertainty and shifting trade policy, as it sources heavily from China and Vietnam.

Tidbits 🍿

• Novo Nordisk CEO Lars Fruergaard Jørgensen is stepping down after eight years, as the company navigates rising competition in the weight-loss drug market. He will stay on temporarily to support a smooth leadership transition

• Moody’s has downgraded the U.S. credit rating to Aa1, citing soaring fiscal deficits and rising interest costs. The agency warned that government borrowing will accelerate, putting upward pressure on long-term rates

• Two of America’s largest cable providers, Charter Communications and Cox Communications, are merging in a $34.5 billion deal. The move aims to counter growing competition from wireless providers and streaming services as traditional pay-TV declines

• Kraft Heinz announced a $3 billion investment—its largest in over a decade — to upgrade its U.S. production facilities

Reading List 📚 :

This week's top book recommendations from CrossDock 📖😀 

• The Great Convergence by Richard Baldwin

• An Extraordinary Time by Marc Levinson

Do you have recommendations? Drop us a message, and we will add it to next week’s list.

This newsletter was curated by Shyam Gowtham

Thank you for reading. We’ll see you at the next edition!