- Walmart could stand to gain more shoppers as a result of the US-China trade war.
- A recent report from UBS said that Walmart could end up with a "broader customer base" thanks to tariffs.
- But the retailer has emphasized that US President Donald Trump’s trade war with China is still terrible news for shoppers.
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It’s no secret that Walmart’s not a fan of tariffs.
CEO Doug McMillon has established himself as a prominent critic of US President Donald Trump’s trade war with China, voicing his concerns about rising prices in the world of retail.
But a report from UBS indicates that a worsening trade war with China might come with an upside for the retail giant.
The report by Michael Lasser, Mark Carden, and Michael Goldsmith concluded that tariffs "are not necessarily viewed as beneficial for Walmart." Still, they could boost the company’s market share, as "Walmart has historically seen share gains during periods of economic hardship." It also added that Walmart’s senior leadership "believes it can manage through" tariffs.
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In other words, consumers feeling the pinch of the US-China trade war are more likely to gravitate toward Walmart because of its low prices, giving the company a "broader customer base." The report also said that Walmart could stand to attract both new shoppers and see frequent customers branch out when it comes to their usual categories.
"For example, a consumer may frequently shop Walmart for consumables, but not apparel. In order to keep these customers, Walmart is focused on its execution in these departments," Lasser, Carden, and Goldsmith wrote.
Associated Press
Still, none of this is good news for customers. If the trade war continues to escalate, Walmart has made it clear that shoppers will become collateral damage. A spokesperson for the company did not immediately return Business Insider’s request for comment on this story.
"Increased tariffs will lead to increased prices, we believe, for our customers," Walmart CFO Brett Biggs said following the company’s latest earnings call, according to CNN.
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Source: Business Insider – feedback@businessinsider.com (Áine Cain)