While Walmart’s tariff-fueled price increase warnings were in contrast, Home Depot has doubled down on consistent pricing, openly resisting its retail competitor’s approach. The split followed former President Donald Trump’s May 17 social media attack against Walmart, in which he urged the retailer “to eat the tariffs” and not raise customer prices. Home Depot CFO Richard McPhail then picked up on May 20 that the home improvement giant would “generally maintain current price levels” in the face of rising import tariffs, setting up a debate over retailing strategies in the midst of revived trade war fever.
Trump’s tariff ultimatum: Walmart forced to take the hit
Trump’s provocative Truth Social tweet targeted Walmart after CEO Doug McMillon cautioned that even lower tariffs would bring prices up on groceries, car seats, and other imports. “Walmart earned BILLIONS OF DOLLARS last year,” Trump wrote, challenging the retailer to use profits to buffer tariff effects “instead of charging valued customers ANYTHING.” The rebuke came despite Walmart bringing in about 33% of merchandise from abroad—greater volumes from China and Mexico—compared to sub-50% foreign purchasing by Home Depot.
Experts point to Trump’s utterance as part of a broader strategy aimed at framing tariffs as pro-consumer ahead of the 2024 election cycle. However, Walmart’s use of imported products—most notably in product lines such as apparel (72% imported) and electronics (68%)—exposes it more than Home Depot’s construction-based inventory.
Home Depot’s supply chain gambit: Local sourcing as price shield
Home Depot’s strategy for pricing is rooted in a deliberate shift towards North American suppliers. Home Depot reduced Chinese imports from 14% of total purchases in 2020 to merely 8% by 2025, having increased Mexican procurement by 22% over the same period. CFO McPhail highlighted this regional diversification, stating, “No single country outside the U.S. will represent more than 10% of our purchases within 12 months.”
It is this local supply chain that allows Home Depot to avoid the worst of tariff effects. While Walmart wrestles with $23 billion worth of Chinese imports each year, Home Depot’s lumber, tools, and hardware increasingly are domestic factory and mill sources—product categories in which U.S. production is competitive even with 30% tariffs imposed on some materials.
Strategic divide: EDLP vs. Value-Add pricing
The conflict uncovers the underlying retail philosophies and how they vary. Walmart’s everyday low price strategy—focusing on daily affordability for 140,000 SKUs compared with ongoing price specials—is subjected to unprecedented pressures from tariffs costing $4.2 billion annually in procurement costs. Home Depot’s value-added pricing philosophy exploits its 2,300-store service footprint and internal delivery fleet to maintain marginally higher prices on certain items while maintaining everyday affordability.
This strategic divergence is played out in financial performance: Home Depot’s Q1 2025 gross margin unchanged at 33.4%, versus Walmart’s declined to 23.1%—an eight-quarter low. Technical builders’ concentration (50% of sales) by the home improvement chain offers further insulation, as commercial customers value availability over minor price movements.
Investor confidence diverges
Wall Street showed respect to Home Depot’s position with a 2% premarket stock increase after its earnings conference call, compared to Walmart’s 1.3% drop after Trump’s assault. Jefferies analyst Maria Bostrom clarified that “Home Depot’s local sourcing and B2B orientation make it a haven in trade storms” while downgrading Walmart to “hold” due to tariff uncertainty.
The gulf extends to price-match practices. Home Depot promotes customer trust in its 30-day price match policy, respecting competitor promotions in stores and online. Walmart, even with its EDLP commitment, has no formal price-match processes except for occasional online accommodations—a weakness since 68% of consumers comparison-check prices in-store in the mid-aisle on mobile devices.
Consumer impact: Budgets vs. Big tickets
For consumers, the merchants’ different journeys lead to trade-offs. Walmart’s possible 4-6% increases on staples such as detergent and canned vegetables would amount to $312 per year in typical households, estimates JPMorgan. Home Depot’s fixed prices make costly items such as water heaters ($650 average) and lawn mowers ($2,300) affordable but offer little help on everyday costs.
The gap could still widen under Trump’s new China trade agreement, which lowers tariffs for now from 145% to 30% until August 2025. While this eases pressure on Walmart’s electronics import, Home Depot’s lumber-heavy inventory is cushioned by bilateral softwood lumber agreements with Canada—a market outside recent tariff activity.
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