Despite noon decision on Wednesday by President Donald Trump break most of its controversial tariff hikesThe risk for retailers remains very present that Tasks can be imposed again in a few months. This is only the uncertainty about the operation of these companies, even though they are starting to plan purchases for the holiday season.
But Walmart INC CEO Doug McMillon said to investors that the largest retailer in the world has sailed many periods of uncertainty Before, including 2018 pricing hikes and the overvoltage of post-payic inflation. And he assured them The company had a strategy Move forward.
“We have a plan to execute. There will be a Christmas, and people will celebrate Christmas, and they will buy items, and we will sell these items to them,” McMillon said at a press conference at the end of the company’s investor day in 2025 in Dallas.
These plans include Keep a robust inventory and the shelves stored despite commercial uncertainty. This is partly possible because of the weight of Walmart with suppliers, which allows the company to absorb a significant part of any cost increase. “Part of the confidence we express is really founded: we know who these buyers are,” said McMillon. “They have excellent tools to manage this long -standing relationship of suppliers, and we think they will execute well.”
Admittedly, the retailer always browsing a delicate path. Although the big grocer any third of what he sells, China is the greatest source of this inventory. And China was not included in Trump’s price break – in fact, the country was distinguished for even higher prices. This means that Walmart is still in danger of higher tasks for a large part of its products.
But McMillon, who, for years, was a buyer at Walmart and Sam’s Club, said that higher prices can be managed with higher products and at higher prices that subsidize articles with lower margin. In other words, higher costs resulting from a price can be offset by a higher price imposed on a low -elasticity article, or articles whose demand is not particularly sensitive to prices.
The company also has a great advantage over many rivals is that many of its goods are reconstitutable. This means that it does not include the same potential risk of being forced to clean up so many unsold goods at reduced prices at other retailers. Instead, he can simply stop ordering a new inventory or decrease the size, if the request is opposed.
“Right now, our merchants are thinking of the quantities,” said McMillon. But it was clear that the company had “not yet canceled anything”.
This story was initially presented on Fortune.com
