Massive retailers respond differently to tariffs
- The Wall Street Journal says Amazon increased prices on over 1,200 low-cost essentials despite pledge to hold the line
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Walmart dropped prices on the same products by nearly 2%, diverging sharply from Amazon, the WSJ said
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Retailers navigate political pressure and supply shocks as tariff policies continue to evolve
As the U.S. grapples with the economic fallout of sweeping new tariffs imposed earlier this year by President Trump, a Wall Street Journal analysisfoundthat Amazon has quietly raised prices on many of its most affordable household products despite previously stating it would avoid such increases.
Amazon denied the Journal's claims.This story is false and misleading. We have not seen the average prices of products offered in our store change up or down appreciably outside of typical fluctuations across millions of items on Amazon," an Amazon spokespersonsaid.
The investigation, which examined nearly 2,500 items using pricing data from e-commerce tracker Traject Data, found that Amazon increased prices on more than 1,200 of its lowest-cost items ranging from deodorant to protein shakes and pet supplies while competitor Walmart lowered prices on the same items by almost 2%.
These moves come as retailers respond to an increasingly volatile business environment shaped by rising import costs, political pressure, and rapidly shifting consumer demand. Analysts say the changes signal differing strategies as the nations largest retailers position themselves amid the tariff storm.
Amazon contends that the study's sample size was not nearly large enough.
"This study is seriously flawed, cherry picking a mere 2,500 items out of the hundreds of millions we sell, and failing to accurately compare like-for-like offers in stock and available for sale across retailers," the Amazon spokesperson told ConsumerAffairs in an email.
"For the full set of 2,500 items investigated, we found the vast majority had no price change or a price decrease, and further we were still competitively priced compared to other retailers."
Did Amazon defyits April pledge?
In April, Amazon publicly vowed to hold the line on prices. But internally, the company struggled to absorb new costs. According to Corey Thomas, an Amazon vendor consultant, thin profit margins and high shipping costs on inexpensive items have made it harder for Amazon to keep prices low.
By contrast, Walmart has greater flexibility due to its network of brick-and-mortar stores, where in-store purchases of higher-margin products can subsidize losses on cheaper online items.
One example cited by the Journal comes from Dayglow, an Ohio-based manufacturer of stackable metal baskets. Amazon sold the baskets for $9.31 in February. By late April, the price had soared to $19.99 even though Dayglow hadnt increased its own prices to Amazon.
Company CEO Nick Morrisroe said his firm faced tariffs as high as 145% on goods in transit from China. While the final tariff rate was reduced to 30%, the uncertainty alone was enough to prompt him to begin negotiating with non-Chinese suppliers and consider raising prices.
Walmart slashes prices, gains competitive edge
The Journal said that while Amazon boosted prices on everyday essentials items that account for one in three units sold on its platform Walmart moved in the opposite direction. Its cuts helped it maintain a reputation for affordability just as inflation and tariff fears rattled consumers.
But an Amazon source who was not authorized to speak publicly noted that there are "hundreds of millions of items available in the Amazon store," so a price comparison of a small sampling of 2,500products is not an accurate reflection of Amazon overall.
The Amazon source also quoted recent independent analysis from Profitero that named Amazon the lowest-priced U.S. retailer for eight years in a row, showing that Amazons online prices were an average of 14% less expensive than all major U.S. retailers in 2024, including up to 6% less on everyday essentials. Learn morehere.
Target also said it is prioritizing internal cost controls over raising prices. Across the industry, many retailers are reportedly using coded language in investor communications to avoid political scrutiny. Earlier this year, Amazon scrapped a plan to display tariff-related price increases on its bargain site, Haul, after criticism from the White House, which labeled the idea a hostile and political act.
President Trump himself took a hard line, warning businesses to EAT THE TARIFFS in May shortly after Walmart publicly said prices would rise in response to import taxes.
Prices still volatile as retailers await clarity
Price movements have fluctuated for various reasons, including seasonal sales, inventory changes, and inflationary pressures. Amazon did cut prices on higher-end items, particularly around its Prime Day event from July 8 to July 11, though those prices rebounded after the promotion ended.
The broader impact of tariffs remains somewhat muted. According to Harvard Business School researcher Alberto Cavallo, prices on imported goods have risen about 2% since March. He notes that the ongoing lack of clarity is leading retailers to make pricing changes more cautiously and incrementally.
Amazon, for its part, defended its pricing strategy. In a statement, the company said, We have not seen the average prices of products offered in our store change up or down appreciably. Our commitment to offering low pricesnot relative percentage changesis what delivers the most value to our customers.
Still, with inflation accelerating and tariff deadlines looming despite a recent extension to August 1 the cost of household basics may continue to rise, especially for consumers who rely on e-commerce for essential goods.
Posted: 2025-07-21 19:59:29
