Walmart warns customers of price hikes due to rising fuel costs

Walmart has warned customers that it will have to raise prices due to the knock-on effects of rising fuel costs caused by the war in Iran.

“We’re always focused on providing low prices for customers,” Walmart Chief Financial Officer John Rainey said on a call Thursday, per Retail Dive.

“That said, these are real impacts to the cost of goods sold for us and our suppliers, and if the current elevated cost environment persists, we’d expect somewhat higher retail price inflation in Q2 and the second half of the year.”

In total the rising fuel costs had resulted in a $175 million hit to the retail giant’s operating income, Rainey said.

It comes as gas prices in the U.S. are expected to remain volatile heading into Memorial Day weekend as the Trump administration continues to try to work out a deal with Iran that would soothe tensions over the Strait of Hormuz – which controls 20 percent of the world’s oil.

Those pressures were reflected at Walmart’s own gas pumps too.

“We have a large fuel business, and we see that in the most recent period the number of gallons that customers fill up with when they come to our fuel stations fell below 10 for the first time since 2022,” Rainey said. “That’s an indication of stress.”

The company has also noticed a shift in customer behavior due to the economic fallout of high gas prices, particularly in higher-income spenders.

“Spend from this cohort used to be restricted to food and essentials, but more consumers are now crossing the aisle to shop non-food,” GlobalData Managing Director Neil Saunders told Retail Dive.

It comes as gas prices in the U.S. are expected to remain volatile heading into Memorial Day weekend as the Trump administration continues to try to work out a deal with Iran that would soothe tensions over the Strait of Hormuz – which controls 20 percent of the world’s oil (Getty)

Meanwhile, lower-income shoppers are acting more budget-conscious, Rainey added.

Though the average price of a gallon of regular gasoline fell by 1 cent over the last week, the national average is $4.47, as of May 18, according to GasBuddy, a tech company that compiles the price of gas across North America.

Now, as millions of Americans prepare to hit the road to kick off summer this upcoming weekend, they can expect to find gas prices still exceeding $4 per gallon.

“As a result, gasoline and diesel prices are likely to remain volatile, and with Memorial Day approaching, any sustained increase in oil prices could begin pushing retail fuel prices higher again in the weeks ahead,” Patrick De Haan, the head of petroleum analysis at GasBuddy, said in a press release.